Deutsche Bank: US tax on remittances could cut PH inflows by P5.66B

Deutsche Bank Research warns that Philippine remittance inflows may fall by 1.4% if US President Donald J. Trump's proposed tax on money sent home by foreign workers is implemented, potentially reducing remittances by $100 million (P5.66 billion) next year.

The research note, dated June 20, highlights the potential impact of the 'One Big Beautiful Bill,' which includes a provision for a 3.5% excise tax on remittances from foreign workers in the US.

Philippine remittances have been sluggish recently and account for 41% of total inflows from the US, making them vulnerable to such taxes; however, not all remittances routed through the US are from Filipinos.

Deutsche Bank Research expects this impact to be short-lived, with structural shifts like changes in overseas Filipino worker (OFW) deployment having a greater influence on long-term trends.

The bank notes that while remittances have been growing at an average of 3% year-on-year post-COVID-19, the share of households with OFWs has declined to 6.5%, suggesting more uncertainty in future trends.