BSP urges ASEAN central banks to weigh AI risks and opportunities

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AI in ASEAN central bank policy

Highlights

BSP urges ASEAN central banks to evaluate both risks and benefits of AI to support mandates on price and financial stability.
BSP Governor Remolona emphasizes scenario planning amid rising uncertainty, highlighting persistent gaps in AI capabilities between ASEAN and regional peers such as South Korea, Taiwan, and China.
The BSP identifies opportunities for ASEAN in large language model training but notes semiconductor capability remains a challenge for the region.

AI considerations for monetary policy

As reported by BusinessWorld, citing the Bangko Sentral ng Pilipinas, central banks in the Association of Southeast Asian Nations should prepare for both the risks and benefits of artificial intelligence as they pursue their mandates on price and financial stability.

In a statement released late on Wednesday, the BSP says AI can help economies lift productivity, spur innovation and widen financial inclusion. It adds that the risks can be addressed through investment in digital infrastructure, skills development and safeguards.

BSP Governor Eli M. Remolona, Jr. says central banks must stay open to a wider range of scenarios amid rising uncertainty and fast-changing technology. Speaking during the International Monetary Fund-World Bank Group Annual Meetings held on Oct. 12-18 in Bangkok, he says price stability remains the core mandate of central banks, but policymakers also need to think more strategically about the future of Southeast Asia.

Regional gap and policy implications

Mr. Remolona says recent global developments have been volatile, prompting central banks to take scenario planning more seriously than before. He also says AI highlights a divide between ASEAN and regional peers including South Korea, Taiwan and China.

At a seminar during the annual meetings, he says some economies in the broader region already have stronger AI capabilities, while much of ASEAN is still trying to find its place in the AI ecosystem. He points in particular to opportunities on the training side of large language models, while noting that semiconductor capability is a more difficult issue.

ASEAN includes the Philippines, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Timor-Leste and Vietnam. The broader ASEAN+3 grouping adds China, Hong Kong, Japan and South Korea.

AI-driven cyber risk and operational resilience in banking was the focus of our earlier report, which outlined why regulators are pressing lenders to plan for more severe technology failures as attacks become larger and more complex. It highlighted the push for “bare metal” recovery options and end-to-end continuity planning for critical services, alongside expectations for stronger governance and human oversight as banks adopt more autonomous systems.

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