The Philippine banking industry must ensure proper safeguards are in place to manage risks arising from artificial intelligence (AI) while promoting its efficient use, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said.

Speaking at the BSP AI Summit 2026 held in late July, Mr. Remolona highlighted that AI has already enabled the financial sector to perform credit scoring more efficiently, detect fraud, and manage risks. The technology has also assisted the central bank in improving its real-time nowcasting, natural language processing for sentiment analysis, and mapping interconnectedness in systemic risk.

"As we move from generative AI to agentive AI, many of us are already seeing the tremendous advantages of these new tools," Mr. Remolona said. "You in the financial sector are finding productivity gains in things like credit scoring, risk management, and fraud detection."

The shift from generative AI, which produces content such as text and images, to agentive AI, which can autonomously execute multi-step tasks with minimal human intervention, marks a significant evolution in how financial institutions deploy the technology across customer-facing and back-office operations.

AI presents new opportunities for both consumers and businesses due to its ability to process complex information promptly, he added.

"So, how can AI make a real impact? AI can process information at remarkable speed. It can identify patterns, generate ideas, and help us make sense of complexity," Mr. Remolona said.

However, the BSP chief also flagged risks associated with AI, emphasizing that the technology requires proper governance because it lacks a sense of direction. This responsibility, he stressed, must be shouldered by both regulators and industry leaders.

"But what AI seems to lack is a sense of direction," he said. "It seems not intelligent enough to decide where we want to go or what outcomes we value most. That remains our responsibility."

Regulators should also ensure that AI is promoted as a tool that supports individuals and institutions rather than a replacement, Mr. Remolona noted.

His remarks come as financial regulators across Asia and beyond grapple with balancing AI-driven innovation against emerging threats, including algorithmic bias, data privacy breaches, and AI-enabled cyberattacks. Central banks and supervisory authorities in neighboring jurisdictions have similarly moved to issue AI governance principles for their financial sectors.

In June, the central bank released guidelines for local financial institutions on ethical AI adoption, which it said must be governed by the principles of sustainability, transparency, accountability, responsibility, and security.

BSP later issued a memorandum mandating banks and other financial institutions to tighten their cybersecurity and technology risk management frameworks against emerging cyberthreats posed by advanced AI systems.

— Katherine K. Chan