Al-Amanah Bank to finance LGU projects next year

Manila, Philippines — Al-Amanah Islamic Investment Bank of the Philippines will commence financing for local government units (LGUs) in the coming year to address funding shortages and address infrastructure gaps and essential public services. Chairman and CEO Amenah Pangandaman revealed the state-owned bank would initially prioritize LGUs in Mindanao before extending the program across the entire country.

Primarily, Al-Amanah provides Shariah-compliant financing to individuals, agricultural workers, cooperatives, and micro, small, and medium enterprises, which adhere to the principles of Islamic law. The bank aims to support revenue-generating projects such as hospitals, health facilities, water systems, public markets, slaughterhouses, cold storage facilities, transport terminals, and power-generation facilities.

Additionally, Al-Amanah will finance service-enhancing projects, including heavy machinery, farm-to-market roads and bridges, municipal halls, schools, convention centers, solid waste management facilities, and real property tax collection systems. All provinces, cities, municipalities, and barangays may apply for funding, provided they have shown balanced or surplus local tax income for the past three years and efficient tax collection with steady growth.

LGUs that designate Al-Amanah as their national tax deposit will receive priority. The bank intends to accelerate project implementation by matching repayments to the revenue generated by the projects, rather than following a fixed calendar. Al-Amanah plans to operate without charging interest, instead constructing, buying, or leasing the required assets and receiving payment for them at a pre-determined price.

All transactions will adhere to strict Shariah-compliant principles, with fixed profit or rental rates for the entire term, and the total cost will be agreed upon and disclosed to the LGU before signing.