Representatives from BARMM ministries, offices, and agencies (MOAs), private sectors including financial institutions and business groups, academe, Ulama (religious sector), civil society organizations, and non-profit organizations attend the 1st BARMM’s Takaful Summit in Cotabato City on Nov. 13, 2024. (Faisal Camsa, Jr./BIO)
COTABATO CITY — The Bangsamoro Government’s Ministry of Finance and Budget and Management (MFBM) hosted the region’s first Takaful Summit here on Nov. 13, aiming to introduce Islamic Insurance as a tool for socioeconomic development and financial protection.
The summit, held at the Pagana Convention Center, brought together representatives from BARMM ministries, offices, and agencies (MOAs), private sectors including financial institutions and business groups, academe, Ulama (religious sector), civil society organizations, and non-profit organizations.
MFBM Minister Atty. Ubaida Pacasem underscored the significance of Takaful, or Islamic Insurance, in providing financial security and aligning with Islamic Finance principles.
“Takaful will not only protect individual assets but also support the broader prospect of Islamic Finance, contributing to the development of Islamic banking and Islamic capital markets,” Pacasem said.
He added, “Takaful helps bring inclusive financial services closer to home, nurturing local MSMEs, supporting the agri-fisheries sector, and providing meaningful support for households, charities, and community organizations.”
MFBM Deputy Minister Abdullah Cusain highlighted the need for collaboration in promoting Takaful in BARMM and across the Philippines.
“Takaful is a viable alternative to conventional insurance because it aligns our identity as Muslims and our values as a people,” he said.
BARMM Shariah Supervisory Board Chairperson Dr. Muhammad Nadzir Ebil defined Takaful as a process of agreement among a group of persons to handle the injuries resulting from specific risks to which all of them are vulnerable.
“Takaful is inclusive because even non-Muslims could either avail or provide services under this insurance system,” he responded when asked about the inclusivity of Takaful.
Ebil also mentioned some types of Takaful currently applied by Islamic companies including insurance on comprehensive and third-party cars; Food hazards; Home, Shop, and Building; Work injury; Health; Money and jewelry; Pilgrims and Umrah in cases of death, illnesses, or total disability; among others.
Islamic Finance Consultant Atty. Salma Angkaya-Kuhutan discussed the potential application of Takaful and stated that Islamic Insurance provides compensation to restore participants to their financial position before a loss, focusing entirely on protection rather than investment growth.
She said, “In general, the key characteristics of Takaful include short-term, single fund, indemnity-based, surplus management, and Shariah Compliance.”
Meanwhile, Carlo Garcia, Supervising Insurance Specialist of the Insurance Commission, provided input on the regulatory framework and prospects, initiatives, and challenges of Takaful in the Philippines.
“To undisclosed their names, we have only two (2) Takaful companies registered in compliance with Shariah Law in the country,” Garcia said.
The summit highlighted the presentation of different key topics by invited Takaful experts and consultants and provided an opportunity for the participants to actively engage and share their knowledge and narratives using the panel of discussions and open forum platforms.
In a global context, Takaful is experiencing consistent growth with a 16.1% year-on-year increase in direct contributions to $25.8 billion in 2022, underscoring its growing significance in Islamic Finance. (Kasan Usop, Jr./BIO)
