US plans 1% tax on remittances

Eric Bustamante, First Vice President and General Manager of the Philippine National Bank (PNB) in New York, asked Philippine President Ferdinand Marcos Jr. to take urgent diplomatic action with the U.S. government over two new economic policies that could seriously impact overseas Filipino workers (OFWs) and the Philippine economy.

Bustamante raised concerns about a newly enacted 1-percent tax on money transfers sent through cash and postal money orders to the Philippines, along with a proposed 20% tariff on Philippine-made goods entering the U.S. market.

Originally, a 3.5% tax on these remittances was proposed but was lowered to 1% in the final version of the “one big, beautiful bill” signed by President Donald Trump on July 4.

“I strongly encourage President Marcos to bring this issue directly to U.S. officials,” Bustamante said. “These new charges—a 1% tax on remittances and a 20% tariff on Philippine products—will hurt not just individual Filipino families but also have a broader negative effect on the Philippine economy.”

He emphasized that President Marcos’ upcoming meetings with U.S. leaders are a critical chance to seek exemptions or changes to these policies.

“These measures put at risk two of the Philippines’ most important economic pillars: the money sent home by OFWs and the country’s exports,” Bustamante explained.

While the 1% tax may seem small, it will impact millions of Filipinos living and working abroad who regularly send money back home. Many undocumented or unbanked workers who rely on cash may avoid official channels and resort to informal methods, undermining economic oversight and stability.

“For a family receiving $1,000 a month, losing $10 each time can make a real difference, especially for those living paycheck to paycheck,” he said.

The proposed 20% tariff on Philippine exports—especially garments and electronics, which represent a large share of trade with the U.S.—is equally concerning.

“This tariff will hurt Philippine exporters, discourage American buyers, reduce profit margins, and could cause exporters to default on loans, which would impact Philippine banks,” Bustamante warned.

He called on the Philippine government to act quickly, urging stronger diplomatic engagement to request exemptions from these measures, as other U.S. allies have successfully done.

“The Philippines has long been a strong partner of the United States. Now is the time to assert that relationship and seek fair treatment, especially to protect OFWs and industries that rely on exports,” he said.

Bustamante concluded by reminding that these policies affect real people—Filipino workers, families, small businesses, and exporters—who depend on remittances and trade for their livelihoods.

“This is not just about numbers. These are lives and futures on the line. We hope President Marcos listens and acts quickly for the Filipino people,” he said.

President Marcos is scheduled to visit Washington, D.C., from July 20 to 23.