VZCZCXRO3640
OO RUEHBC RUEHCHI RUEHDA RUEHDBU RUEHDE RUEHDH RUEHFK RUEHGI RUEHHM
RUEHJS RUEHKSO RUEHKUK RUEHLH RUEHNAG RUEHPB RUEHPW RUEHROV RUEHTRO
DE RUEHML #1121/01 1470856
ZNR UUUUU ZZH
O 270856Z MAY 09
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4205
INFO RUCNISL/ISLAMIC COLLECTIVE IMMEDIATE
RUEHBUL/AMEMBASSY KABUL IMMEDIATE 0432
RHHMUNA/USPACOM HONOLULU HI IMMEDIATE
RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION COLLECTIVE IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE

UNCLAS SECTION 01 OF 02 MANILA 001121 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR EAP/EX AND EAP/MTS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PHUM KWMN KISL RP
SUBJECT: MICROFINANCE TO EMPOWER MUSLIM FILIPINAS 
 
¶1. (U) Summary: The first Islamic microfinance program in the 
Philippines aims to empower Muslim women living in the Autonomous 
Region of Muslim Mindanao, a region in the southern Philippines 
plagued by poverty and conflict.  The intent is to expand the 
program nationwide to help Muslim Filipinas economically and 
socially, and to promote peace, rule-of-law, and progressive Islamic 
values.  End summary. 
 
PROGRAM LAUCHED WITH ONE AMERICAN DONATION 
------------------------------------------ 
 
¶2. (U) Emboff met with Director of the Philippine Council for Islam 
and Democracy (PCID) Amina Rasul and her sister/partner Fatima Irene 
Tillah Rasul on May 12, 2009 to discuss the first Islamic 
microfinance program in the Philippines.  Amina Rasul is a human 
rights and peace advocate known for her efforts to enhance the 
status of Muslim women in the Philippines.  Fatima Rasul is former 
Philippines Department for Trade and Industry Regional Secretary for 
the Autonomous Region of Muslim Mindanao.  The microfinance program 
is part of the Livelihood Program of The Magbassa Kita Foundation, 
Inc., a non-profit organization dedicated to literacy, poverty 
alleviation, and peace.  The Islamic Microfinance Program was 
launched in October 2008 with a $100k personal donation from 
Filipina-American Dr. Myrna L. Soriano. 
 
NOT JUST MICROFINANCE, BUT ISLAMIC MICROFINANCE 
--------------------------------------------- -- 
 
¶3. (U) Microfinance is not new in the Philippines and is part of the 
Philippine government's anti-poverty campaign.  However, the region 
of Mindanao is severely underserved by microfinance institutions 
despite having the highest poverty rates in the Philippines.  Of the 
47 towns lacking access to microfinance in the Philippines, 33 are 
located in this region.  Reasons include security concerns, remote 
locations, and illiteracy.  Executive Director of the Philippine 
Office of Muslim Affairs Datu Ali B. Sangki believes that prejudice 
against Muslims by mainstream financial institutions may also be a 
factor.  Currently, no Islamic banks operate in the Philippines 
(although one has been chartered, and some mainstream banks offer 
Islamic banking products).  Rasul's Islamic Microfinance Program is 
the first of its kind in the Philippines, and one of very few 
microfinance programs operating in Muslim Mindanao. 
 
GOAL: EMPOWER MUSLIM WOMEN-RESIST SAUDI INFLUENCE 
--------------------------------------------- ---- 
 
¶4. (SBU) Rasul's efforts to empower Muslim women took a giant step 
forward when she helped launch the National Ulama Council for the 
Philippines (NUCP) in 2007.  Unlike similar Muslim groups in other 
countries, the Council emphasizes a leadership role for women (the 
Ulema) and is therefore an important leadership forum for them.  The 
Islamic Microfinance Program is the brainchild of that leadership. 
According to Amina Rasul, she developed the Program to respond to 
the needs and demands of the Ulema for "financial security" for 
Muslim women.  The Program aims to empower Muslim women by providing 
access to economic opportunities, independent sources of income, and 
networks of like-minded women.  Higher incomes not only help women 
caregivers put rice on the table, but also enhance their status in 
their families and communities.  Rasul explained that Muslim 
Filipinas have traditionally enjoyed respect and autonomy in their 
communities.  However, the influence of Saudi missionaries over the 
past 20 years has caused the "democratic space" of Muslim women to 
shrink.  She pointed to several communities in Mindanao that have 
passed laws requiring women to veil.  Rasul sees microfinance as a 
way to reverse this "negative trend" for Muslim Filipinas and help 
them to defend or even take back rights and status. 
 
¶5. (U) Rasul describes her microfinance program as a pilot project, 
which, if successful, could expand to every Muslim community in the 
Philippines.  It currently provides microloans of up to $80 (there 
is no minimum amount) to Muslim women living in the Autonomous 
Region.  To apply for a loan, women must form a group of six (based 
on the Grameen community lending model).  They must have an existing 
business and pass a background check.  The group of six women 
selects a leader who travels weekly to the Program Center to make 
loan repayments for the group.  The program funds livelihood 
businesses such as home-based convenience stores that buy 
commodities in bulk and sell them retail is small amounts; eateries 
and food production; charcoal production; sewing; and laminating 
businesses.  Rasul also hopes to encourage ethnic craft businesses. 
 
 
SPECIAL EXEMPTION FOR ACTS OF GOD AND WAR 
 
MANILA 00001121  002 OF 002 
 
 
----------------------------------------- 
 
¶6. (U) In keeping with Sharia law, the women pay "program costs" of 
3.33% monthly for their loans, but pay no "interest."  This rate is 
higher than the 2% monthly interest which is standard in loans from 
rural banks.  Loans can be forgiven if armed conflict or other 
unavoidable problems make it impossible to repay.  Amina Rasul said 
the 85% repayment rate is "good enough," considering the Program 
operates in the midst of an active armed conflict.  Fatima Rasul 
believes the income generated by the "program costs" fee is enough 
to ensure the program is sustainable.  However, additional funds 
would be needed to expand the scope of the program. 
 
PROGRAM PROVIDES MORE THAN MONEY 
-------------------------------- 
 
¶7. (U) Borrowers receive technical support, including instruction in 
bookkeeping and business planning, and religious counseling that 
promotes a progressive interpretation of Islam, including 
instruction from an imam emphasizing the Islamic requirement to 
repay debts.  The women are required to present their business plans 
to the larger group, thereby giving them public speaking experience 
and developing networks of like-minded women to support and 
encourage each other.  Rasul believes that establishing networks and 
habits of communication among rural women is a key aspect of 
empowering them, just as important as an independent income.  The 
program also offers literacy training. 
 
WOMEN ARE KEY TO PEACE, LAW, AND "MAINSTREAM" ISLAM 
--------------------------------------------- ------ 
 
¶8. (U) Development experts recognize microfinance as a tool for 
alleviating poverty, one cause of radicalism.  Rasul's Islamic 
Microfinance Program could provide women in rural Muslim Mindanao 
with the status and knowledge they need to help communities resist 
conservative Islamic proselytizers, combat Islamic radicalization, 
and promote peace in the region.  As one Asian Development Bank 
official explained, when a community is involved in a microfinance 
project, its group members tend to keep other members focused on 
income generation, rather than armed conflict.  Microfinance could 
also help create a positive cultural identity for Philippine Muslims 
by promoting "mainstream" Islamic values and institutions. 
 
¶9.  (SBU)  Comment: The Rasuls will review the program at the end of 
its first fiscal year in July 2009 to determine whether changes are 
needed.  Islamic microfinance experts from Indonesia have offered to 
provide technical support.  This program is timely given current 
developments in Mindanao, and serves many U.S. interests there.  It 
may therefore be worth further monitoring, and perhaps assisting and 
replicating elsewhere. 
 
KENNEY