DOF: Only 20% will be affected in US-imposed remittance tax
THE Department of Finance said only 20 percent of Filipinos may be affected should the United States imposed tax on remittances.
Photo courtesy of Philippine News Agency
The Department of Finance (DOF) said only 20 percent of Filipinos in the United States will be affected by the proposed tax on remittances imposed by the American government.
“Out of the 4.4 million overseas Filipinos in the US, only 20 percent will be affected by the proposed tax proposal which is seen to take effect on January 1, 2026 if passed,” Palace Press Officer Undersecretary Claire Castro said, quoting DOF’s chief economist Domini SD. Velasquez.
“The tax will affect non-US citizens including green card holders and those with working visas – each one visa holders,” she added.
This number is equivalent to 880,000 people.
The DOF said 41 percent of remittances from OFWs are routed to the US, however, not all of them come from Filipinos that are living in America as remittances are routed to the US via correspondent banks.
“The expected loss in remittances might only be as much as $100 million out of the US$36.5 billion projected remittances in 2026,” the DOF explained.
“The estimated effect is minimal decline of 0.003 percent of GDP. 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. Based on the BSP survey, about 90 percent of the remittances are spent on food and other household needs,” it added.
US’s One Big Beautiful Bill, also referred to as OBBB is a proposed budget reconciliation bill in the 119th United States Congress. It was passed by the House of Representatives on 22 May 2025.
Under the proposed bill, the US would impose a 3.5 percent excise tax on remittances outside America including those to the Philippines.
Once approved, non-US citizens workers sending money to their families would need to pay higher fees.
The proposed measure also orders stricter verification requirements for remittance centers which could lead to the exposure of undocumented immigrants.
According to the Bangko Sentral ng Pilipinas, the US remains the largest source of remittances to the country.