THE Bangko Sentral ng Pilipinas (BSP) has released governance principles to help banks and financial institutions safely expand their use of artificial intelligence (AI) in customer services, fraud detection and other operations.
Memorandum M-2026-031, “Governance Principles for Artificial Intelligence in Financial Services,” is a voluntary guidance paper intended to help BSP-supervised institutions develop AI stewardship policies and risk management frameworks proportionate to the “nature, extent, scale, complexity, and materiality of their AI systems.”
The guidance establishes five core principles under the “STARS” framework: Sustainability, Transparency, Accountability, Responsibility (Social Fairness), and Security.
Under sustainability, institutions are encouraged to develop AI systems that generate long-term value while minimizing environmental impacts through energy-efficient computing and reduced electronic waste and to invest in workforce development and human-centered AI.
Transparency requires a centralized inventory of AI systems, clear disclosure when AI influences financial decisions, and sufficient documentation on model design, data sources and error resolution.
Accountability calls for human oversight throughout the AI lifecycle, clearly defined responsibilities among management, developers and oversight functions, and adequate staff expertise in AI, data science and finance.
Security calls for robust cybersecurity measures, regular risk assessments, and continuous monitoring to detect bias, hallucinations and other anomalies.
BSP Deputy Governor Lyn Javier warned that the absence of a comprehensive AI governance framework exposes institutions to operational, technology, model, market conduct, reputational, strategic and legal risks, and that ungoverned AI systems “may perpetuate biases, leading to unfair practices and the exclusion of individuals from access to financial products and services.”
The BSP acknowledged that institutions are at varying stages of AI adoption, making tailored governance practices important. It clarified the guidance is not meant to restrict innovation or endorse specific technologies but to “encourage ethical and responsible use of AI in the industry.”
The central bank said it will continue monitoring AI developments and issue regulations “whenever necessary to foster innovation and preserve the stability and competitiveness of the financial system.”
