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UAE: The Global powerhouse of islamic banking and finance

by Contributor
written by Contributor

DUBAI, UAE – The UAE has established itself as the global leader in Islamic banking, fintech, Takaful, and capital markets, positioning the country at the forefront of Shariah-compliant finance. The UAE leadership in these sectors is a result of strategic foresight, regulatory excellence, and technological innovation, making the nation the global hub for Islamic financial solutions.

As of 2026, UAE Islamic banking assets have surpassed AED 1.15 trillion with 45 licensed banks, accounting for approximately 25% of the total banking system. This growth trajectory has been driven by the country’s strong regulatory framework and commitment to Shariah-compliant financial services. The UAE Islamic banking sector has seen double-digit annual growth for the past five years, reflecting its systemic importance and resilience.

The government’s long-term strategy remains equally ambitious. National targets to expand Islamic banking assets toward AED 2.56 trillion by 2031 continue to guide policy, capital formation, and institutional development, reinforcing Dubai’s role as the anchor of the global Islamic financial ecosystem.

The Islamic fintech sector in the UAE is thriving, with the country quickly emerging as a global leader in Shariah-compliant digital solutions. By 2026, the UAE will have witnessed the launch of over 30 fintech startups, offering innovative solutions in digital payments, peer-to-peer financing, crowdfunding, and Islamic digital currencies. These developments have enabled financial inclusion across Muslim populations and are creating new investment opportunities for global investors. The sector is maturing into “institution-grade infrastructure” to reach a projected $6.43 billion by 2030. 

Takaful, the Islamic alternative to conventional insurance, has become a major component of the UAE’s Islamic finance landscape, and the takaful market has reached around USD 200 million. The market is rapidly embracing digital platforms, streamlining processes such as claims management and policy issuance. The country’s regulatory framework ensures transparency and customer protection, fostering a dynamic, customer-focused Takaful market. Takaful providers in the UAE are now exploring new models, including family Takaful, health insurance, and general insurance, while maintaining full compliance with Shariah principles.  

The UAE is recognized as the global leader in Islamic capital markets, particularly in the issuance and listing of Sukuk (Islamic bonds). Currently, the Nasdaq Dubai platform has USD 101 billion in outstanding Sukuk listings, making it one of the largest venues for Sukuk in the world. The UAE continues to play a pivotal role in green sukuk, aligning with the global sustainability agenda and attracting international investors.

In line with global trends, the total Sukuk market is expected to exceed USD 1.5 trillion by 2026, with the UAE serving as a primary gateway for issuers from Asia, Africa, and the Middle East seeking global capital.

Mr. Muhammad Zubair Mughal, CEO, AlHuda CIBE states, “UAE has firmly established itself as the global hub of Islamic banking and finance, backed by strong regulation, market depth, and sustained innovation. Its leadership in Islamic banking assets, sukuk markets, and sustainability-linked finance reflects a mature ecosystem that continues to set global benchmarks.” “At AlHuda CIBE, we view UAE as a critical platform for advancing Islamic finance education, advisory, and cross-border collaboration, connecting emerging markets with the global Islamic financial industry.”

The UAE regulatory environment is a key pillar of its leadership in Islamic finance. The Dubai International Financial Centre (DIFC) continues to serve as a top choice for international Islamic finance institutions, offering a common law framework and ensuring full foreign ownership. At the federal level, the Central Bank of the UAE is modernizing financial systems with initiatives such as open finance frameworks, real-time payment systems, and digital currencies, ensuring the UAE Islamic financial sector remains ahead of the curve.

Sustainability has become a core feature of Islamic finance in the UAE. Most UAE-based Islamic banks have adopted ESG (Environmental, Social, and Governance) principles, aligning Shariah law with global sustainability goals. UAE institutions are pioneering sustainability-linked Islamic finance structures, ensuring that green sukuk and other Shariah-compliant financing options contribute to the global green economy. The UAE strategic geographic location at the crossroads of Asia, Europe, and Africa amplifies its role as a cross-border hub for Islamic finance. With world-class infrastructure and robust financial ecosystems, the UAE serves as a natural gateway for Islamic trade, finance, and investment.

The UAE Capital of Islamic Economy vision integrates Islamic finance with other sectors such as halal trade, tourism, food, and lifestyle, reinforcing the nation’s position as a global leader in Islamic finance.

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Business

NCMF gets joint declaration of support from DOF, BSP, SEC, global thinktanks in  promoting Islamic finance for all Filipinos 

by Contributor
written by Contributor

THE NATIONAL Commission on Muslim Filipinos (NCMF) got a joint declaration of support from the Department of Finance (DOF), Bangko Sentral ng Pilipinas (BSP), Securities and  Exchange Commission (SEC), and global thinktanks in promoting Islamic finance not only among Muslim Filipinos but also to non-Muslims for financial inclusion and ethical investing. 

“As regulators and policymakers, our shared responsibility is to ensure that Islamic finance remains faithful to its ethical foundations while meeting the highest standards of prudential regulation, risk management, and governance,” NCMF Secretary Sabuddin N. Abdurahim said during the “5th International Islamic Finance Conference” at Shangri-La The Fort, Manila, Bonifacio Global City, Taguig City. 

The two-day conference on February 2-3, organized by the NCMF Bureau of Muslim  Economic Affairs (BMEA), concluded with the signing of a Joint Declaration of  Strengthening the Philippine Islamic Finance Ecosystem on Tuesday, which gathered around 300 local and international participants, including policymakers, regulators,  financial institutions, development partners, academicians, bank industry practitioners,  and members of the diplomatic corps. 

Department of Finance (DOF) Secretary Frederick D. Go said, “This year, the Philippines, as ASEAN (Association of Southeast Asian Nations) Chair, has a unique opportunity to deepen regional integration, attract investments, and expand access to finance… And so, I encourage the NCMF to further advance its Islamic finance initiatives and capitalize on this  opportunity to strengthen the country’s position in the regional Islamic finance landscape.” 

He said that in 2024, the Insurance Commission (IC) issued the first takaful operator’s licenses, marking another significant milestone for Islamic finance in the Philippines.  

“The IC has so far issued licenses to Pru Life, Etiqa, Stronghold Insurance Company, Inc., and  CARD Mutual Benefit Association, Inc. What’s great about this is that takaful opens the door to ethical, cooperative insurance solutions that are available to all Filipinos,” Go added. 

BSP Senior Assistant Governor Atty. Arifa A. Ala said that BSP established the Islamic  Finance Coordination Forum, chaired by BSP, to bring together all key agencies and build a unified ecosystem. This whole-of-government approach ensures sustainability,  competitiveness, and full integration into the Philippine financial system. 

“The results speak for themselves. From a single Islamic bank before 2019, we now have two more Islamic banks and multiple takaful operators,” she said.  

“Islamic finance is not about loans alone. It is about restoring choice, dignity, and belonging.  And this is the Philippines we are building, one where inclusion is not promised, but practiced,” she added.  

Tapping the untapped market 

SEC chairperson and CEO Atty. Francisco Ed Lim emphasized the huge potential for  Islamic finance in the Philippines.  

“I think this was validated when the government issued the first-ever Shari’ah bond (Sukuk).  I think it was five times oversubscribed, about a billion dollars. From that alone, you can see the potential, coupled with the fact that almost 10% of our nearly 120 million population comes from the Muslim community. So just those two things combined really demonstrate that Islamic finance is an untapped potential for the Philippine capital markets,” he said during the 5th IIFC.  

“Shari’ah and Islamic finance equities and bond trading will really make our capital markets more active and vibrant, and hopefully it will benefit more Filipinos, not only the investors but also the corporates. Our corporates need sources of funding to expand their businesses, and I think Islamic finance, as was demonstrated by that five-times oversubscribed government issuance, can be an excellent source for business expansion.  We’re really serious about this,” he added. 

“Since I assumed the Chairmanship of the SEC, integrity is the invisible currency of our capital markets, and we should also uphold that in Islamic finance guidelines for the markets,” he urged.  

“We’ve been working with the BSP and other players, like the PDEx (Philippine Dealing  Exchange), which is the exchange for bonds and field ratings, and with the support of the  ADB (Asian Development Bank), I don’t see any reason why we should not progress—at least double or triple the pace we have achieved in the recent past,” he said.

IIFC’s importance to ASEAN prosperity  

Meanwhile, Undersecretary for Local Government Marlo L. Iringan, delivered the message of Department of the Interior and Local Government Secretary Juanito Victor C.  Remulla, which read, “We thank the NCMF led by Secretary Abdurahim for reviving this conference. The 5th IIFC should give us renewed purpose and a renewed commitment to shared prosperity. With the NCMF as one of the Department’s attached agencies, the DILG  remains committed to institutionalizing reforms. This conference also serves as a valuable  preparation for the Philippines ASEAN Chairmanship as we strengthen regional  cooperation in advancing forward-looking policies for inclusive growth.” 

NCMF BMEA director Saleha P. Sacar underscored that the holding of the 5th IIFC, under the Department of Foreign Affairs’ International Commitment Fund (ICF), reflects the  Commission’s strong commitment to advancing Muslim Filipinos’ economic empowerment. She described the 5th IIFC as a “clear and concrete manifestation of NCMF BMEA’s seriousness and resilience in promoting the economic interests of Muslim Filipinos.” 

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Opinion

PH as a key player in global Halal trade history

by Contributor
written by Contributor

IN HIS intervention during the 2nd ASEAN-GCC Summit on May 27, 2025, in Kuala Lumpur, Malaysia, Philippine President Ferdinand Marcos Jr. highlighted the central role of the Halal industry and Islamic finance in forging the trilateral trade agenda of ASEAN, China, and the Gulf Cooperation Council (GCC).

Calling for the harmonization of standards and certification systems, President Marcos’ appeal is very timely as the Philippines serves as the country coordinator for ASEAN-GCC relations.

While the Philippines is a Muslim-minority state, this Catholic-majority Southeast Asian country played an important role in facilitating the inclusion of the Halal industry in the broader regional free trade agenda of ASEAN, which is now being extended to the GCC. 

When the Asian Financial Crisis hit ASEAN economies between 1997 and 1998, investment in the Halal industry and Islamic finance served as an alternative economic recovery strategy of ASEAN member-states. One example is Malaysia who specifically included the industry in its Vision 2020 launched in 1998.

With BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East Asian Growth Area) in existence since 1994, the subregional grouping served as a platform for Southeast Asian Muslim majority states to promote the popularization of Islamic economics in the region as part of their bid to become a regional or global Halal hub.

This is where the Philippines enters. 

In 1999, Halal certification bodies (HCBs) from Muslim minority bodies convened in Jakarta, Indonesia, and founded the World Halal Council (WHC) – one of the oldest global Halal regulatory networks. Attending the historic meeting are representatives from the Islamic Da’wah Council of the Philippines (IDCP), which is considered the first HCB in the Philippines, having formalized its own Halal certification standards and procedures since 1995. 

Since then, officials from IDCP performed various top leadership roles in the WHC up to the present. By being a member of the WHC, the IDCP served as an instrumental role for Philippine-based food exporters to access key Halal markets since IDCP’s Halal certification is recognized in more than 20 countries since WHC members exercise mutual recognition agreements (MRAs) with one another.

In January 2002, the Philippines hosted the 1st BIMP-EAGA Islamic Business Summit in General Santos City. Through this event, Halal trade officially became a part of the regional trade agenda of ASEAN.

When Brunei Halal Brand was launched in 2009, Brunei government officials and investors had particularly looked at Mindanao as a preferred investment destination.

In 2015, the WHC called for a meeting that invited all Halal certifiers across the globe to condemn the efforts of the European Union (EU) to formulate its own regional Halal standards. Referred to as the “Istanbul meeting”, IDCP served as an important resource person during the event, as the organization shared its milestones in resisting non-Muslim intervention in the Philippine Halal industry regulation since 2001.

In December 2017, the Philippine Accreditation Bureau (PAB) became a full member of the International Halal Accreditation Forum (IHAF) based in the United Arab Emirates.  PAB emerged as one of three state bodies from Southeast Asia that became part of the new global regulatory network, along with Thailand and Cambodia. However, PAB played a key role in the expansion of IHAF’s membership since PAB is instrumental in accrediting a South Korea-based Halal certifier to become part of IHAF’s global network. 

When I am doing my fieldwork for my PhD thesis on the political economy of the Philippine Halal industry in 2023, I also learned from my informants that the Philippine Department of Agriculture (DA) also performs the coordinator role in facilitating the harmonization of Halal standards implemented across ASEAN.

As the Philippines is poised to host the 2026 ASEAN Summit next year, it is imperative for the government to latch on and continue to amplify the important role of Halal trade in connecting the economies of ASEAN, China, and the Gulf Region. Acknowledging and consolidating the individual efforts of various Philippine-based Halal stakeholders is a first step to realize the proposed trilateral trade agenda articulated by President Marcos in his intervention during the recently-concluded ASEAN-GCC Summit. 

BIONOTE:

Brian U. Doce is a scholar-practitioner with a background in politics and international relations. Aside from being a lecturer in various universities in Metro Manila, Brian has extensive experience working in the space of business-government relations, policy advocacy, and diplomacy. You can contact him through his e-mail: scholarbud@gmail.com. 

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