\nIslamic finance growth will stay strong this year, as Southeast Asia drives demand for financial products that comply with Islamic or Sharia law, debt watcher Standard & Poor's said.<br rn\/><br rn\/>But the Philippines is unlikely to benefit from this since Islamic banking remains an uncharted territory here, an official of the country's lone Islamic bank said on Monday.<br rn\/><br rn\/>"This type of banking is an alien notion to the public. [They don't know the difference] between Islamic banking and the conventional one," said Maharlika J. Alonto, head for accounting and finance of Al-Amanah Islamic Investment Bank of the Philippines. <br rn\/><br rn\/>She said their focus remains informing the public about Islamic banking and crafting rules that are consistent with its unique characteristics.<br rn\/><br rn\/>"We still have to iron out the taxation and regulatory framework," she added.<br rn\/><br rn\/>Unlike traditional banks, Islamic banks do not charge interest, which the Koran prohibits. They earn by acting like an equity investor to its borrowers by forging partnerships, lease-to-own deals and similar arrangements.<br rn\/><br rn\/>Bangko Sentral ng Pilipinas officials were not immediately available for comment.<br rn\/><br rn\/>Alonto also said Al-Amanah's focus now is on stabilizing its operations after incurring losses for several years.<br rn\/><br rn\/>"We haven't really talked about expansion yet. Our primary focus is really refurbishing and rebranding the bank," she said.<br rn\/><br rn\/>"[Compared with other Islamic lenders in the region] we are lagging," Alonto said, even as she noted that capital infusion by the Development Bank of the Philippines was expected to strengthen their operations.<br rn\/><br rn\/>"These are baby steps but God willing, our financing products that are Sharia-compliant will be available this year," she added.<br rn\/><br rn\/>Alonto said Al-Amanah plans to lend up to P400 million this year, mostly in Mindanao, where eight of its nine branches are located.<br rn\/><br rn\/>Standard & Poor's said Islamic banking sustained its growth last year even as most of the world's financial systems were trying to contain the global financial crisis.<br rn\/><br rn\/>The rating firm said assets of the top 500 Islamic banks expanded by 28.6 percent to $822 billion by the end of 2009, compared with $639 billion in the prior year.<br rn\/><br rn\/>"We believe Islamic finance has become a recognized and a specific segment of finance on its own with still bright growth prospects," Standard & Poor's credit analyst Mohamed Damak said in a statement.<br rn\/><br rn\/>"We think Islamic finance is set to make further inroads in developed Western markets while Southeast Asian countries will likely fuel the Islamic finance advance in Asia in 2010," he added.<br rn\/><br rn\/>But there were issues to be settled to continue growth. "Specifically in non-Muslim countries, and especially in Europe... they include the size of demand for Sharia-compliant products, regulatory and tax environments, the support of the political and financial communities, sovereign sukuk issuance, and the possibility of a common strategy for extending Islamic finance across EU countries," he said.<br rn\/><br rn\/>DBP gained control of Al-Amanah in 2008 after buying the holdings of the National Government, state pension funds Government Service Insurance System and Social Security System and individual investors.<br rn\/><br rn\/>Al-Amanah was created via Presidential Decree No. 264 issued by then President Ferdinand E. Marcos to serve the banking needs of the Muslim community.<br rn\/><br rn\/>It has been operating as a commercial bank since 2006 but will revert to Islamic banking in 2013, which is the end of DBP's five-year development plan for the bank.