BSP Senior Director Melchor Plabasan explained that the upcoming regulations will focus on managing biases, ensuring accuracy in AI-driven decision-making tools, and promoting ethical AI practices.
Melchor T. Plabasan
“AI regulation that you can expect from the BSP is generally more clarificatory and at the same time, covering risk—the 20% of the risk that are not yet covered particularly on management of bias, accuracy and ethical use of AI,” he added.
The central bank plans to issue these guidelines in the first half of the year.
Existing regulations address technology risk management, cybersecurity, and data privacy. Nevertheless, the new AI regulations will further clarify those areas and address the remaining risks.
Plabasan highlighted that many local financial companies are already implementing or planning AI projects. He estimated that over a third of them have established dedicated AI departments.
He acknowledged that AI is exciting, offering numerous innovative ideas. However, Plabasan cautioned that users must remain aware of the associated risks.
Plabasan ensures that the central bank of the Philippines is committed to fostering an enabling regulatory environment that would promote the responsible use of AI.
BSP Governor Eli Remolona Jr. has also acknowledged the risks of AI, particularly generative AI’s tendency to “hallucinate” or generate fabricated information.
Eli M. Remolona, Jr
“They tend to imagine things that never happened. They are prone to herding. They tend to make the same recommendations to different institutions regardless of specific circumstances,” Remolona warned.
The BSP’s proactive approach reflects its dedication to balancing technological advancement with prudent risk management.
