Manila: The United States' plan to impose a tax on remittances sent by foreign workers, including a significant number of overseas Filipino workers (OFWs), is expected to have only a minimal impact on the Philippine economy, according to Malaca±ang.

According to Philippines News Agency, the Department of Finance has indicated that the proposed tax would affect only 20 percent of the 4.4 million overseas Filipinos residing in the US. If enacted, the tax proposal is slated to take effect on January 1, 2026. Palace Press Officer Claire Castro noted in a briefing that while 41 percent of remittances are routed through the US, not all originate from Filipinos there, as they often pass through US correspondent banks.

The anticipated reduction in remittances is projected to be around USD100 million from the expected USD36.5 billion in 2026, translating to a negligible decline of 0.003 percent in the gross domestic product (GDP).

The proposed US legislation, known as the One Big Beautiful Bill, includes a 3.5 percent excise tax on remittances from non-US citizens. Castro highlighted that this measure would significantly affect the families of OFWs, with a deduction of USD3.50 for every USD100 sent to family members in the Philippines, thereby reducing the received amount to USD96.50.

While the economic impact is projected to be minimal, Castro emphasized that the tax could substantially affect families who depend entirely on remittances from non-US citizen family members working in the US.