Philippine central bank eyes AI rules for banks

Artificial intelligence should not diminish banks’ responsibility to uphold data privacy.

The Philippine central bank seeks to regulate the banking sector’s use of artificial intelligence (AI) as part of a push for ethical use and better accuracy.

Regulations that will be issued later this year would cover the remaining 10% to 20% area that is “untouched” by rules that cover, but are not specific, to AI, said Melchor T. Plabasan, senior director for technology risk at the Bangko Sentral ng Pilipinas (BSP).

The regulations will cover the ethical use of AI, how to manage bias, and improve AI’s accuracy, amongst other things, he told the Asian Banking & Finance-Insurance Asia Summit 2025 in Manila in March.

“It arose from the results of our gap analysis,” Plabasan told Asian Banking & Finance on the sidelines of the summit. “[AI] should not diminish the responsibility of financial institutions when it comes to upholding data privacy and confidentiality of the data control. AI is just a tool.”

Philippine banks are ready to join the AI revolution and equip themselves with the right risk management tools, Plabasan told the forum.

He cited at least three agencies that have issued rules on AI. The Trade department has issued a national AI strategy roadmap, whilst the Department of Information and Communications Technology and Civil Service Commission have jointly issued a memo on ethical and trustworthy use of AI in the government.

Meanwhile, the Intellectual Property Code, Data Privacy Act of 2012, and Financial Products and Services Consumer Protection Act all cover various aspects of AI use as well, Plabasan said.

He said the central bank hopes that AI use would spur lending, particularly among digital banks.

“They’re a bit slow in terms of lending,” he said. “I would like to see the maturity of AI when it comes to credit scores, because that will help increase the amount of money that can be lent by digital banks in particular, which can also drive profitability.”
The BSP also plans to issue whitepapers around AI use, Plabasan said.