The Bangko Sentral ng Pilipinas (BSP) has issued a set of governance principles to guide banks and other financial institutions as the adoption of artificial intelligence (AI) continues to expand across the sector.

Issued through Memorandum No. M-2026-031 on 24 June, the “Governance Principles for Artificial Intelligence in Financial Services” provide guidance for financial institutions in developing their own AI governance and risk management frameworks.

The BSP’s framework promotes the responsible and ethical use of AI through five core principles collectively known as STARS: Sustainability, ensuring AI creates long-term value and supports workforce development; Transparency, requiring clear documentation and disclosure of AI-driven decisions; Accountability, maintaining human oversight and responsibility for AI outcomes; Responsibility, promoting fairness, privacy and the avoidance of bias; and Security, protecting AI systems from cyber threats, data manipulation and operational risks throughout their lifecycle.

The memorandum applies to all BSP-supervised financial institutions (BSFIs), although implementation will depend on the nature, scale, complexity and materiality of their AI systems, as well as their overall risk profile. The guidance also covers outsourced service providers involved in AI-related activities under a shared-responsibility model.

While the principles are voluntary and non-binding, the BSP said they represent its minimum supervisory expectations for AI adoption. Financial institutions are encouraged to integrate the principles into their governance structures, risk management strategies and operational processes.

“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 Javier said. “We want BSFIs to take advantage of AI, especially to serve their customers, and do so while being guided by developing global standards.”

The central bank noted that risks arising from emerging technologies remain covered by its existing Information Technology Risk Management framework, which includes oversight of information security, outsourcing arrangements and project management.

According to the BSP, the principles are aligned with international guidelines developed by the Organisation for Economic Co-operation and Development (OECD), the Association of Southeast Asian Nations (ASEAN), the Financial Stability Institute (FSI) and other global bodies.

The issuance forms part of the BSP’s broader efforts to harness technology to support financial inclusion, innovation and the stability of the Philippine financial system.