BSP urges central banks to assess AI’s impact on inflation

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. has urged central banks to assess how artificial intelligence (AI) could reshape inflation, productivity, and financial markets as monetary authorities navigate an increasingly uncertain global economy.

Remolona emphasized that central banks must prepare for both the opportunities and risks associated with AI while fulfilling their mandates of maintaining price and financial stability.

The growing use of AI across industries could influence how businesses produce goods, deliver services, manage costs, and make investment decisions, creating new considerations for monetary policymakers.

For Filipino consumers and businesses, understanding these changes is important because monetary policy decisions influence inflation, borrowing costs, access to credit, and overall economic stability.

Remolona raised these concerns during the International Monetary Fund (IMF)-World Bank Group Annual Meetings and related engagements held Oct. 12 to 18, 2026, in Bangkok, Thailand.

“Price stability remains the core mandate of central banks. As uncertainty grows and technology evolves rapidly, including AI, we need to consider a wider range of scenarios and think more strategically about the future of Southeast Asia,” he said.

The BSP governor stressed the importance of forward-looking monetary policies as emerging technologies create opportunities for economic growth while introducing new risks to financial systems.

AI has the potential to improve productivity by automating repetitive tasks, strengthening data analysis, and helping businesses use resources more efficiently.

These improvements could eventually influence production costs and economic output, although their effects on inflation will depend on how widely and effectively businesses adopt the technology.

At the same time, increased reliance on AI could introduce operational, cybersecurity, and financial risks that regulators must consider as digital technologies become more integrated into financial services.

The BSP’s primary mandate is to maintain price stability conducive to balanced and sustainable economic growth, using an inflation-targeting framework to guide monetary policy decisions.

The central bank also promotes financial stability by monitoring risks that could disrupt financial institutions, payment systems, and the broader economy.

As AI adoption expands, monetary authorities may need to account for changes in productivity, employment, consumer behavior, and financial market activity when assessing economic conditions.

Remolona led the Philippine central bank delegation in discussions on how AI could support productivity, innovation, and financial inclusion.

The delegation emphasized the importance of investing in digital infrastructure, developing workforce skills, and establishing safeguards to manage risks associated with emerging technologies.

Expanding digital infrastructure could help financial institutions improve service delivery and reach underserved communities, particularly in areas where access to traditional banking services remains limited.

However, the benefits of AI-driven financial innovation will also depend on effective consumer protection, data security, and regulatory oversight.

The Philippine delegation included Monetary Board Member Jose L. Querubin, Deputy Governor Zeno Ronald R. Abenoja, and Senior Assistant Governor Edna C. Villa.

The BSP officials engaged with fellow central bankers, development partners, and investors to discuss global and regional economic developments and prospects.

The annual meetings provided an opportunity for policymakers to exchange views on economic uncertainty, technological transformation, and the challenges facing monetary authorities.

For Southeast Asia, these discussions carry particular importance as economies seek to strengthen financial systems while expanding digital services and promoting inclusive growth.

During the meetings, Remolona also received a plaque recognizing his “A-” rating in Global Finance magazine’s Central Banker Report Cards 2026.

The annual assessment evaluates central bank governors based on their performance in areas such as inflation control, economic growth, currency stability, interest rate management, and political independence. (BSP)