9 hours ago
Trump's proposed remittance tax raises alarms among Filipino migrants
LOS ANGELES: For millions of Filipino workers in the United States, sending money back home is more than a financial transaction – it's a vital act of care and survival.
A proposed 3.5 per cent tax on remittances, embedded in the Trump administration's sweeping 'One Big, Beautiful Bill,' has raised alarms among Filipino immigrants who rely on remittances to support families in the Philippines.
If enacted, the tax would take effect on Jan 1, 2026, and apply to remittances sent by non-US citizens, including green card holders and H-1B visa holders.
Aquilina Soriano Versoza, executive director of the Pilipino Workers Center of Southern California (PWC), a grassroots nonprofit that services and organises low-wage and immigrant Filipino communities in the US, warned that the proposed measure would significantly harm the Filipino community.
'This bill will significantly affect Filipino workers who are not only making a living for themselves but also working hard to support their families back home in the Philippines,' she said.
Versoza further criticised the proposal as discriminatory: 'Targeting remittances sent by non-US citizens with increased taxes is a clear act of discrimination that unfairly burdens immigrant communities. Tax policies should be applied equitably to all individuals, regardless of their immigration status.'
The proposed levy comes at a time when many Filipino families in the Philippines are already struggling with inflation and economic instability. For countless households, remittances from Overseas Filipino Workers (OFWs) spell the difference between financial security and hardship.
Josephine Biclar, a caregiver and worker leader at the Pilipino Workers Center in Los Angeles, shared how inflation has already strained her ability to send money home.
'In our caregiving jobs, no work equals no pay. So right now, we are barely making ends meet, hardly sending anything to the Philippines because of inflation. If there are additional taxes on remittances, there will hardly be any money left to send.'
Remittances are a key pillar of the Philippine economy, accounting for 8.3 per cent of the country's Gross Domestic Product (GDP) and 7.4 pe cent of Gross National Income (GNI). The United States remains the largest source of these funds.
In 2024, Filipino migrant workers sent a record-breaking $38.34 billion back to the Philippines – an increase of 3 per cent from the previous year, according to the Bangko Sentral ng Pilipinas (BSP). This growth was driven by both land-based and sea-based workers, highlighting the enduring commitment of OFWs to their families.
Analysts warn that the proposed tax could reduce remittance flows by as much as 5.6 percent, potentially costing the Philippines an estimated $500 million annually. The US plays a central role in remittance transactions, as most remittance centers abroad channel funds through correspondent banks based in the US.
BSP Governor Eli Remolona Jr responded cautiously, saying the central bank is still evaluating the proposed legislation and hopes it will not have a significant negative impact.
Filipino immigrant communities in the US fear the measure will make their already difficult lives even harder. Some worry the tax may push workers to rely on informal and riskier channels to send money home.
Versoza also pointed out logistical and ethical challenges the law could introduce: 'Additionally, money remittance service providers currently do not require information about a sender's immigration or citizenship status. Implementing this bill would not only force these companies to begin verifying this information, it would also raise significant concerns about privacy, data security and potential racial profiling. Singling out non-citizens for additional financial penalties is evidently discriminatory.'
Biclar emphasised how the combined effects of inflation, taxes, and immigration fears are affecting Filipino workers' lives:
'Life for Filipinos in the US is difficult because of inflation and tariffs on remittances. Due to the high cost of living, we are forced to reduce the amount of money we send to our families in the Philippines. Sending money is really affected because even our survival here is a struggle, and if additional taxes are imposed on remittances, where else will we get extra money?'
Beyond the economic impact, advocates warn that the remittance tax is part of a broader legislative package that also includes cuts to social safety nets – measures that could further marginalise immigrant communities.
Biclar also cited growing anxiety among immigrants amid heightened immigration enforcement:
'Aside from tariffs and inflation, the current immigration situation in the US is affecting everyone, not only the undocumented but also those with papers. We have no choice but to slow down at work. It's scary to go out because of ICE raids.'
As the bill continues to face deliberation in the Senate, its final outcome remains unclear. Still, Filipino workers and advocacy groups are preparing for the possibility that the remittance tax could become law – an outcome many believe would deeply undermine the cross-border bonds that sustain Filipino families around the world. - Philippine Daily Inquirer/ANN
