Remittances rise to $3.1 Billion in March

Personal remittances from overseas Filipino workers (OFWs) rose by 2.6 percent to $3.13 billion in March from $3.05 billion in the same month last year amid sustained demand for Filipino labor abroad.

- By KEISHA TA-ASAN

However, economists are sounding the alarm over a new tax proposal in the United States that could threaten the steady inflow of remittances. The US remains the largest source of cash remittances to the Philippines.

Under the proposed measure, the US government may impose a five-percent excise tax on immigrant remittances.

Analysts said this could discourage OFWs from using formal banking channels and shrink the overall volume of funds sent home.

Reinielle Matt Erece, an economist from Oikonomia Advisory & Research Inc., warned that if the tax were applied to March inflows alone, it would translate to around P7.7 billion in potential losses for Filipino households.

"The impact starts at the household level. Less remittances means less spending, lower disposable income and weaker consumption," Erece said.

Remittances also provide a large cushion against foreign exchange fluctuations by being a key source for the country's dollar reserves.