One big bothersome bill
The One Big Beautiful Bill, approved by the US House of Representatives last May, is now under Senate review. Under the bill, non-US citizens, including green card holders, visa holders (H-1B, L-1), temporary residents, and undocumented immigrants, will be slapped a 3.5-excise tax on personal remittances sent abroad.
Transfers by verified US citizens or nationals are exempt. The tax applies regardless of transfer size and is collected at the point of transfer by banks and remittance providers.
Once the law is in force, remittances by Filipinos in the US face more downside risks, Deutsche Bank Research said.
Philippine remittances have been “sluggish” in recent months, and the bank said the tax could lead to a 1.4-percent decline in remittance inflow or equivalent to 0.1 percent of gross domestic product (GDP). Turn to page 11
As of the first quarter, the US has contributed around 45 percent of the total overseas Filipinos’ remittances, categorized by region. This is significantly lower than the remittances in the past few years, which had floated above 45 percent, and as such could further decrease (at a minute level) if the Senate passes the OBBB without any revisions to reduce or remove the excise.
AB Capital Securities said that despite the US being a significant contributor of remittances, on which many Filipino families rely, the ongoing conflicts in the Middle East have a more material effect.
Prolonged unrest in the region can potentially lead to job losses or deter overseas Filipino workers from the area, forcing them to return to the Philippines.