DOF: US tax on OFW remittances affects <1M Filipinos

The United States' proposed tax on money sent home by foreign workers would minimally impact the Philippine economy, affecting fewer than a million Filipinos in the US, according to the Department of Finance.

Palace Press Officer Undersecretary Claire Castro cited a report from the agency's chief economist during a press briefing, stating that only 20% of the 4.4 million overseas Filipinos in the U.S. will be affected by the proposed tax starting January 1, 2026.

The One Big Beautiful Bill Act includes a new 3.5% excise tax on remittances from non-US citizens such as green card holders and visa workers, which could result in an estimated $100 million loss out of projected $36.5 billion in remittances for 2026.

While the economic impact is minimal at approximately 0.003% of GDP, it may be substantial for families relying solely on these funds, with a $3.50 deduction for every $100 sent by an OFW to their family in the Philippines.

The Bangko Sentral ng Pilipinas (BSP) survey indicates that about 90% of remittances are spent on food and household needs, highlighting potential difficulties for families who depend heavily on these funds.