Al-Amanah Islamic Investment Bank Of The Philippines

Al-Amanah Islamic Investment Bank Of The Philippines Republic Act No. 6848, otherwise known as â€Å"The Charter of the Al-Amanah Islamic Investment Bank of the Philippines† outlines that the primary purpose of the Islamic bank is â€Å"to promote and accelerate the socio-economic development of the Autonomous Region by performing banking, financing and investment operations and to establish and participate in agricultural, commercial and industrial ventures based on the Islamic concept of banking.† In addition to allowing the bank to act as a universal bank capable of offering both conventional and Islamic banking products and services, the Sections No. 10 the bargaining power of multilateral and bilateral aid organizations(USTDA, WB, ADB, JBIC) is high due to their involvement with micro-finance and development banks; the large size and unorganized nature of the labor sector affords it little bargaining power; bargaining power among depositors is highly skewed towards the higher income deciles who’s deposits ac count for 88.3% of the savings in banks, with the lower deciles having nor bargaining power. (2) With regard to the bargaining power of buyers, the higher income deciles belonging to the middle and upper classes resided and/or did business in the National Capital Region (NCR) and demand services such as â€Å"à ¢Ã¢â€š ¬Ã‚ ¦electronic banking, payroll services, and bill payments.†; The power portions of the population find it difficult to obtain financing from formal banks due to their situation, and thus do not have much bargaining power, but their sheer numbers offer a potentially large market. (3) With regard to the threat of new entrants, any new Islamic banks allowed by the BSP could actually benefit the Amanah Bank by providing much needed visibility for the beleaguered Philippine Islamic banking sector. (4) With regard to the threat of substitute, notable alternatives that customers may opt for are informal financial institutions, employers that provide loan programs, or complete abstinence from banking entirely. Another threat is the outflow of capital from the country. (5) With regard to rivalry among existing players, the tendency of banks to be large tends to lead them to avoid small borrowers and savers, as such the government has had to develop the banking system so as to include such institutions as thrift and rural banks which cater to the needs of small borrowers and savers who would otherwise resort to informal institutions. In order to counter the threat of oligopoly the government competes in the financial sector via the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP). (Isnaji, 2003)