The Bangko Sentral ng Pilipinas (BSP) has issued new guidelines on the use of artificial intelligence (AI) by banks and financial institutions in the Philippines. Released through Memorandum No. M-2026-031, these voluntary guidelines aim to establish a framework for the responsible application of AI technologies.
A Closer Look at the BSP's AI Guidelines
AI is spreading across BSFI operations and STARS provides them with principles that can help them innovate while mitigating unintended consequences from the use of the technology.
Lyn Javier, BSP Deputy Governor
The guidelines outline five key governance principles summarized by the acronym STARS: Sustainability, Transparency, Accountability, Responsibility, and Security. These principles are essential as banks increasingly rely on AI systems for tasks such as fraud detection and credit-risk scoring.
According to a 2024 BSP survey, nearly half of the responding financial institutions had implemented AI solutions, reflecting a notable trend toward automation in the banking sector. While AI can streamline operations, the BSP emphasizes that human oversight remains essential.
Banks are encouraged to maintain accountability by ensuring that humans ultimately oversee decisions made by AI systems. This includes situations where AI analyzes a borrower's financial history to recommend loan approvals or rejections.
The BSP warns against potential biases inherent in AI systems. If algorithms are trained on flawed data, they risk perpetuating inequalities, particularly affecting marginalized communities. To counteract this, the BSP advises that training data be rigorous and representative.
As these guidelines are voluntary, the BSP aims to foster innovation without imposing restrictive regulations that could hinder technological advancements in the financial industry. However, the central bank will monitor developments in AI and may introduce stricter regulations in the future if necessary.