THE Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) pledged financing to micro-sized, small-scale and medium-sized enterprises (MSMEs) seeking to be part of the multitrillion-dollar global halal industry.
A statement issued by the state-owned Islamic bank quoted CEO Amenah F. Pangandaman as saying they are still determining how much the lender can set aside for halal-related financing as it works with other government agencies to expand support for the industry.
Due to strict adherence to high-quality and health standards, more Muslims and non-Muslims are choosing halal products. The value of the global halal industry is expected to grow from its current estimate of $4 trillion to $10 trillion by 2030.
‘We should not miss the boat. There is so much room for growth-growth to show that halal is more than just a dietary restriction in observance of our faith. But it is an opportunity to push forward economic development alongside inclusivity,’ Pangandaman said.
Supply gap
THE Philippines’s continued reliance on imports, with more than $100-million worth of halal products having been brought into the country over the past few years, have created a supply gap, according to the AAIIBP chairman.
‘We have the demand to fill, we have our people to do the job, we have a huge market waiting for us, but without the capital-the financing-it will always be an arduous task to get out of that niche market concept attached to halal,’ Pangandaman added.
However, she noted that financing barriers, such as costs related to certification, facility and production upgrades, make it hard for MSMEs to enter the halal market.
‘Financing for our MSMEs must support the entire value chain. It is not enough that we provide their capital for production, as it is still a long journey as we move toward certification, logistics, scaling up and eventually exporting,’ Pangandaman said.
Expansion plans
BEYOND providing capital for MSMEs, the bank has entered into a memorandum of understanding with the Department of Trade and Industry to finance halal expansion, including facilities for halal slaughterhouses and accreditation fees.
The bank has also partnered with the Cooperative Development Authority to support the expansion of cooperatives involved in the halal sector.
Moreover, the AAIIBP and the National Commission on Muslim Filipinos has agreed to pursue a memorandum of understanding to support MSMEs and halal certifying organizations with Islamic financing.
‘There is no denying that halal certification, here and elsewhere, can be difficult, extensive and costly for MSMEs, but the returns for both consumers and businesses are also abundant,’ Pangandaman said. ‘As we work toward accessible and understandable certification, we must also put in mind that it should not become an unnecessary hurdle for our MSMEs.’
MSMEs consist 99.5 percent of the country’s business establishments, providing 63 percent of total employment and are the closest to local communities.
As stipulated in the Philippine Halal Industry Development Strategic Plan, the government aims to secure P230 billion in investments by 2028, double the number of halal-certified products and services to 6,000 and create 120,000 jobs.