The Bangko Sentral ng Pilipinas (BSP) has issued a new guidance paper on AI governance for financial institutions, setting out principles for how banks and other BSP-supervised entities should manage the risks of adopting artificial intelligence.

The memorandum, dated 24 June 2026 and signed by Deputy Governor Lyn I. Javier, is to guide institutions in building their own AI governance frameworks rather than impose a fixed set of rules.

Compliance with the guidance is voluntary. The BSP said institutions should scale their governance approach to match the size, complexity, and materiality of their own AI use, rather than apply a one-size-fits-all standard.

The guidance is built around five principles the BSP calls STARS. Sustainability calls for AI systems that are environmentally efficient and human-centred.

Transparency requires institutions to maintain a clear inventory of their AI systems, disclose when AI is influencing a decision, and keep sufficient documentation for audits.

Accountability keeps humans responsible for AI-assisted decisions, with clearly assigned oversight roles from technical teams up to the board.

Responsibility, which the BSP frames as social fairness, requires institutions to guard against biased training data, respect data privacy rights, and ensure AI systems don’t exclude vulnerable groups from financial services.

Security calls for regular testing against AI-specific threats such as adversarial attacks and data poisoning, alongside ongoing monitoring for bias or hallucination.

Five Stages, One Shared Responsibility

The guidance also maps a five-stage AI system lifecycle, planning, development, validation, deployment, and monitoring, with recommended controls at each stage.

Validation, for instance, calls for an independent team separate from an AI system’s original developers to review its outputs before deployment.

The framework extends to outsourced service providers and vendors that support BSP-supervised institutions’ AI systems, applying a shared-responsibility model based on what each party can control.

The guidance follows earlier BSP work on AI oversight, including a review of generative AI’s role in banking and financial services and a subsequent effort to draft ethical AI regulations for the sector.

The BSP said it will continue monitoring AI developments and may issue further regulations as needed to balance innovation with financial stability.

Featured image: Edited by Fintech News Philippines based on an image by user21016237 via Magnific.