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Waqfs in the Philippines

It is well known that Islam was introduced into the Philippines as early as the thirteenth century by Muslim merchants and was embraced particularly in the southern islands of Sulu and Mindanao. The Islam that emerged in these far away territories was a mixture of pre-Islamic usage and local custom with the basic teachings of Islam. A strict application of the Islamic law did not take place.

The Spanish conquest appears to have had little impact on the Muslim sultanates of Sulu and Mindanao (Barra, 1988). The relative autonomy that these sultanates enjoyed came to an end when the islands were ceded to the United States in 1898. The American policy towards the Muslims was governed by the need to respect their religious freedom. This policy found its official expression in the Universal Declaration of Human Rights passed by the United Nations in 1948. During the American occupation the waqfs were left entirely to the discretion of the Muslim community. There was not a single legislative enactment designed to administer the waqfs. Thus we do not observe in the American occupied Philippines the harmful impacts of the French or British colonialism on the waqf system. It will be argued here that this difference is due to the way the mother countries viewed their own foundations and the third sector. While a comparative assessment of the policies towards the foundations in Britain, France and the United States, would fall beyond the scope of this book, it is well known that the American policy was the most lenient (Salamon and Anheier, 1997; Archambault, 1997; Kendall and Knapp, 1996). The fact that we do not observe in the Philippines the harsh state interference that we have observed in the French and British colonies is not accidental, but rather, a reflection of the American attitudes towards the foundations.

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After the independence, the Marcos administration attempted to have the Islamic personal laws codified. This was considered to be an essential step towards reconciliation with the Muslims of the Philippines. For this purpose a research group was established. The group was ordered:

  1. To survey, and collect materials on Islamic law particularly as they related to the current Philippine laws.

  2. To reconcile Philippine laws with Islamic law

  3. To prepare a draft of the proposed Code of Philippine Muslim Laws

Although the committee did some work on the law of the waqfs, their recommendations were not included in the final draft. This was because the waqfs were considered to violate the basic secularist principle: the separation of the church and the state. The Code was signed into law on February 4, 1977 with the chapter on waqf laws missing. Consequently, the policy of benign neglect continued even after the independence.

With this minimal government interference, the Muslims of the Philippines were left free to establish their own waqfs according to their own customs and beliefs. Presently, waqf establishment is subject to the Philippine Corporation Law, a secular body of law adopted during the American occupation. Property rights, on the other hand, are governed by the Philippine Civil Code, a reproduction of the Spanish Code. There are also few pertinent Articles in the Code of Muslim Personal Law. These pertain to the establishment of testamentary waqfs, waqf bil wasiyya.

The Islamic Trust and Development Foundation aims to promote waqf establishment among the Muslims. Meanwhile, attempts to centralise can also be observed in the Philippines. The so-called Markazos Shabab Al-Muslim fil-Filibin, a voluntary organisation of the conservative Muslims of the Lanao province, for instance, acts as the sole administrator of the waqf properties. The Muslims are encouraged to make their donations to the Markazos that uses these funds to construct and maintain the mosques, schools and other charitable institutions. The Markazos has also been able to attract cash funds from the rich donators of the Middle East. The Markazos limits its activities strictly to the public/charitable foundations. It also functions as a know-how centre for the donators. In a land where waqf establishment is not a wide spread tradition, this is obviously a crucial service. The Markazos provides the founders with waqf deeds in conformity with the Islamic law. In return for these services, the founders are required to furnish financial statements twice a year.

Charitable institutions have been granted generous tax exemption by the Philippine government. Providing that the institution is purely charitable and is registered with the Securities and Exchange Commission as a charitable institution, the tax exemption is complete. Such institutions are also not subject to the labour laws nor have the industrial courts jurisdiction over these institutions. The family waqfs, on the other hand, are not granted tax-exemption, as they are not considered charitable. The law considers these institutions as joint-stock companies. This is obviously a secular argument and conflicts with Islamic law.

The best-known example of a family waqf is Jami’atul Philippine al-Islamiyah established by a prominent family in Marawi City. It has established the only Islamic university in the country populated exclusively by Muslim students. Since part of the net income accrues to the founder’s family, the waqf does not enjoy tax-exemption. The waqf has juridical personality and is managed by a board that is chaired by the eldest son of the founder. The Jami’atul Philippine constitutes an exception: there are very few other family waqfs in the Philippines (Gamon, 1999).


Source: Murat Cizakca, A History of Philanthropic Foundations: The Islamic World From the Seventh Century to the Present. Republished with permission.