Malacañang on Thursday downplayed the potential economic effects of a proposed remittance tax in the United States, saying the measure would have a limited impact on the Philippine economy but could significantly affect families of overseas Filipino workers (OFWs) in the US.
Palace Press Officer Claire Castro, citing the Department of Finance (DOF), said only about 20 percent of the estimated 4.4 million Filipinos living in the US would be subject to the proposed 3.5 percent excise tax. The policy, part of the US’ so-called One Big Beautiful Bill, is targeting remittances sent by non-US citizens, including green card holders and those on work visas like H-1B. If passed, the tax could take effect by January 1, 2026.
Castro explained that not all money routed through US banks comes from Filipinos residing in the US, as many remittances are processed through US-based correspondent banks. As a result, the estimated loss in remittances is projected at only USD 100 million from the USD 36.5 billion expected in 2026, translating to a marginal 0.003 percent dip in the country’s GDP.
However, Castro admitted the real burden would be felt by Filipino families dependent on remittances. “So essentially, only USD 96.5 will be received by the family in the Philippines,” she said. “While we see the estimated effect is minimal in the economy, it may be substantial for many families who solely rely on the remittances from a family member in the US, talking about non-US citizen.”
