THE proposed tax on remittances in the United States will affect fewer than a million Filipinos in the U.S., according to the Department of Finance, which also acknowledged that families in the Philippines may be “substantially” affected.
Palace Press Officer Undersecretary Claire Castro cited a report from the agency’s chief economist saying that out of 4.4 million Filipinos in the U.S., “only 20% will be affected by the proposed tax proposal, which is seen to take effect on January 1, 2026, if passed”.
The proposed ‘One Big Beautiful Bill Act’ passed by the US House of Representatives includes a 3.5% tax on remittances by non-US citizens.
Castro further quoted the DOF saying that the tax will affect non-US citizens including green card holders and those with working visas or H1 visa holders.
“Although, 41% of the remittances are routed to the US, not all of these are from Filipinos in the US because remittances are routed to the US via correspondent banks,” she read.
The estimated effect to the Philippine economy is also minimal, according to the DOF, about “$100 million out of the $36.5 billion projected remittances in 2026.”
However, the effect on families who solely rely on remittances from family members in the U.S. may be “substantial”, with families only receiving $96.50 for every $100 sent.
The report cited a Bangko Sentral ng Pilipinas survey showing that about 90% of the remittances are spent on food and other household needs. (ABS-CBN News)
