What Vietnam’s AI law teaches us

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April 28, 2026 | 12:00am

In the evolution of modern technology, we often debate whether innovation should lead before regulation or vice versa.

As we navigate 2026, the arrival of Vietnam’s first landmark AI Law suggests that the best way to view regulation is similar to a school curriculum.

A well-designed curriculum provides the standards and rules necessary for a cohesive education, yet it is specifically designed to provide students the freedom and flexibility to explore within those bounds. Without a curriculum, learning is chaotic and directionless; with it, students are ethically guided and properly governed so they graduate into a responsible society. Vietnam has just published the first “national syllabus” for AI in Southeast Asia, and its ripples are being felt across the entire ASEAN fintech corridor.

On March 1, 2026, Vietnam became the first country in our region to move beyond mere “guidelines” and enact a standalone, comprehensive legal framework revolving around the ethical use of Artificial Intelligence.

This is a binding mandate for both domestic and foreign firms operating within their borders. The law is built on a risk-based tiering system that feels familiar to those who have studied the EU AI Act, but with a distinctively Southeast Asian focus on national security and data sovereignty. It classifies systems into categories ranging from “unacceptable” to “low” risk. Systems that manipulate human will or build mass facial-recognition databases from unconsented scraping are strictly banned. Meanwhile, “high-risk” AI, which includes applications in health, education and finance, must pass mandatory conformity checks and maintain strict human oversight.

Transparency is a cornerstone of this new mandate. People must now be told when they are interacting with an AI agent rather than a human, and all deepfakes or synthetic media must be clearly labeled so consumers are not misled. To oversee this, a central governance body led by the Ministry of Science and Technology maintains a national AI portal for high-risk registrations. While most existing systems have a 12-month grace period to comply, essential sectors like finance have until Sept. 1, 2027, to meet these rigorous standards.

To balance these strict rules, Vietnam is offering “extra-curricular” support through funding, tax breaks and AI sandboxes designed to fast-track approvals through safe experimentation.

Why does this matter for the Philippines?

Because Vietnam is the first ASEAN country with a full AI statute, it has effectively become the regulatory benchmark for the region. This is a wake-up call for neighbors like us, who are still tiptoeing on what often feels like AI-regulated quicksand. Other ASEAN economies may soon copy Vietnam’s risk-based model, potentially nudging the region toward a more “sovereigntist” style of AI governance that prioritizes national security and cultural stability over a purely rights-focused Western model. However, this also creates a fragmentation risk.

If each ASEAN nation builds its own unique AI law, regional firms will face multiple, conflicting regimes, significantly raising legal and engineering costs for those trying to scale across borders. Companies and global investors may also treat Vietnam as the pinnacle of AI, potentially pulling capital and talent away from slower-moving neighbors who lack clear sandboxes.

For the Philippines, it may be tempting to follow suit quickly, but we must navigate the nuances and challenges of regulatory lag. There is a pressure on our politicians and agencies to catch up, which could lead to rushed or poorly designed rules that copy Vietnam’s risk tiers without matching their institutional capacity or sandbox incentives. We must also consider how Vietnam’s strict stance on facial recognition and unconsented scraping might affect cross-border data handling between our nations, especially for security or marketing uses.

In the world of Philippine fintech, the stakes are high. If Vietnam’s model becomes the regional standard, our private banks and fintechs, especially those eyeing cross-border lending or AI-driven KYC, will need to retrofit their models to meet new requirements for explainability and human-in-the-loop review.

In Vietnam, state-owned and commercial banks are now required to notify customers when AI is used in lending and must allow for human review of adverse decisions like loan denials. This is a practice the Bangko Sentral ng Pilipinas should consider adopting. By implementing a similar four-tier AI framework, the BSP could avoid one-size-fits-all rules, focusing oversight on core lending models while allowing internal analytics or basic chatbots to operate with lower friction.

Just like a school curriculum, Vietnam has proven that a structured syllabus for AI is not a hindrance to growth but a catalyst for it. By providing clear rules for high-risk systems while offering extra-curricular support through sandboxes and tax breaks, they have removed the ambiguity that often kills investment. This framework represents a major win for regional stability, moving us away from the quicksand of uncertainty and toward a future where AI is ethically grounded and responsibly governed. It signals a positive shift for ASEAN: a future where consumer trust is built into the code, and innovation is given a safe, structured playground to thrive.

The Philippines already has a patchwork of data privacy and consumer protection rules that touch on AI, but we lack a unified framework. Our authorities should avoid layering too many overlapping AI rules on top of existing financial regulations. Instead, we should issue a single, streamlined AI-finance guideline that references structured risk classification without duplicating provisions. This will foster a higher bar for consumer trust and ethics, making AI nutrition labels for credit scores and robo-advisory chatbots the standard for our industry.

By expanding our own sandbox capacities to include AI-specific pilots for KYC and underwriting, we can ensure that the Philippines remains a competitive destination for tech talent, rather than watching it migrate to neighbors who have already mastered the curriculum.

As AI governance becomes a fundamental component of our digital licenses, our ability to demonstrate ethical, explainable AI will be what defines the next decade of Filipino fintech leadership in the global stage.

Lito Villanueva is the Philippines’ leading thought leader in inclusive digital finance. As EVP and Chief Innovation and Inclusion Officer of RCBC, he has driven large-scale digital initiatives that advanced financial inclusion. He is the founding chairman of FinTech Alliance PH, representing 95 percent of the country’s digital retail financial transactions with an aggregate user base in excess of 100 million, and the first global chairman of the Alliance of Digital Finance Associations. Recognized as a People Asia Men Who Matter 2025, Asia Trailblazer, and AGORA Awardee, he continues to shape the fintech landscape in the Philippines and beyond.