PHL remittances may fall 1.4% if Trump tax is implemented

REMITTANCE inflows to the Philippines may fall by 1.4% if US President Donald J. Trump's proposed tax on money sent home by foreign workers is implemented, Deutsche Bank Research said.

- A.R.A.Inosante

In a June 20 note, Deutsche Bank Research said Philippine remittances have been “sluggish” in recent months and face more downside risks if the so-called “One Big Beautiful Bill” is signed into law in the US.

“The imposition of such a tax in the US could lead to a 1.4% decline in remittance inflow (0.1% of gross domestic product) to the Philippines,” it said.

“However, we believe that the impact of a tax on remittances is likely to be short-lived; structural shifts are more likely to affect the growth of remittances in the longer term.”

Mr. Trump is pushing for the passage of the “One Big Beautiful Bill,” which includes a provision imposing an excise tax of 3.5% on money sent abroad by foreign workers in the US. Remittances made by US citizens and nationals are exempted from the tax.

The bill was approved by the US House of Representatives in May, and is now being deliberated by the Senate.