The Philippines’ central bank governor called for stronger safeguards as banks expand their use of artificial intelligence (AI). Speaking at the Bangko Sentral ng Pilipinas (BSP) AI Summit 2026 in Manila on 27 July 2026, Governor Eli M. Remolona, Jr. highlighted the need to manage risks associated with AI systems while maintaining accountability, trust, and human oversight.
AI is increasingly being used in Philippine banking for credit assessment, fraud detection, customer service and data analysis. With the theme “From Pilot to Practice: AI Adoption in the Philippine Financial Sector,” the summit focused on leveraging AI to enhance financial access for Filipinos while tackling the hurdles to its widespread adoption.
At the summit, Governor Remolona said financial institutions should adopt AI while recognising its limits in decision-making. He noted that AI is already being used for credit scoring, fraud detection, and risk management. Within the central bank, AI has also supported real-time nowcasting, sentiment analysis through natural language processing, and the mapping of systemic risk connections.
Governor Remolona stressed, however, that AI should support rather than replace human judgement. He said, “AI can identify patterns, generate ideas, and help us make sense of complexity. But deciding where we want to go or what outcomes we value most by using AI, that remains our responsibility.”
Philippine banks are moving AI out of pilot programmes and into core operations including loan approvals and fraud monitoring, under a new central bank framework.
The BSP issued the rules on June 24 through Memorandum No. M-2026-031, titled “Governance Principles for Artificial Intelligence in Financial Services.” The guidance rests on five principles the BSP calls STARS: sustainability, transparency, accountability, responsibility, and security.
“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,” BSP Deputy Governor Lyn I. Javier said in announcing the framework.
The rules are voluntary, but the BSP said they reflect its minimum supervisory expectations and apply to all BSP-supervised financial institutions with the scale of implementation tied to each institution’s size and the complexity of its AI use. The framework also extends to outsourced vendors that support banks’ AI systems, under a shared-responsibility model.
Guidance from Oradian for Philippine lenders notes that to prove AI-generated credit scores aren’t discriminating against protected groups, banks need regular algorithm audits and full documentation of how the models reach their decisions.
According to the BSP Financial Stability Report (FSR) and Memorandum No. M-2026-031 (Governance Principles for AI), the central bank and the Financial Stability Coordination Council (FSCC) actively leverage machine learning to monitor macro-prudential vulnerabilities and system-wide market liquidity across the Philippine economy, while assessing the operational risks that supervised financial institutions face as digital banking expands.
However, these rules align with the BSP’s IT risk and fraud management standards at the transactional level. Although the BSP encourages banks and electronic money issuers to use the platform for real-time automated anomaly detection, the rules require compliance officers to have the last word on such instances in order to minimise the likelihood of false positive detections.
Even when utilising AI-powered tools like chatbots and automated credit-scoring systems, banks and other financial institutions are still entirely responsible for upholding consumer rights under the BSP Consumer Protection Framework.
Financial institutions should ensure that Financial Consumer Assistance Mechanisms (FCAMs) are easily accessible, that negative credit decisions are explained, that each unlawful online transaction is investigated, and that clients have access to human intervention rather than only automated choices.
Long-term safety is the primary concern as Philippine banking advances past the testing phase. At a recent financial conference, regulators reaffirmed that how securely and responsibly banks can manage technology in day-to-day operations is now more important than what the technology can accomplish.
