Why Trump’s remittance tax will be ‘devastating’ for Filipino-Americans

Filipino-American community leaders warn of long-term effects of Trump’s latest actions, including on remittances back home, state-funded health insurance

A new tax on international remittances introduced under US President Donald Trump’s sweeping economic reform bill is drawing criticism from Filipino-American communities, who say the measure will hit working-class migrants hardest and threaten the livelihoods of their families in the Philippines.

Under the new law, green card holders and migrant workers will be charged a 3.5 per cent levy on overseas money transfers starting on January 1 – a move that analysts warn will carry far-reaching consequences in both countries.

“For decades, Filipinos in the US have often been in the top five countries for remittances … the fact that those [remittances] will be taxed now is going to have an impact on how much they receive on their end and their livelihoods in the Philippines,” said James Zarsadiaz, director of the Yuchengco Philippine Studies Programme at the University of San Francisco.

“It’s not just the Filipinos living here, but their family and their friends and their communities that rely on those remittances,” Zarsadiaz told This Week in Asia.

In 2024 alone, Filipinos in the US sent more than US$14 billion to the Philippines, making them one of the top sources of overseas remittances for the Southeast Asian country.

Zarsadiaz said the new tax fit a broader pattern in US politics of making immigration economically untenable.

“This is something that government leaders and politicians have done for easily 150 years … where they’ve tried to make it harder for immigrants to stay by slapping fees and imposing fines and taxes,” he said.

“They know that they’re going to keep digging themselves in a deeper economic grave, so much so that they’re going to feel compelled to leave. Any time you do things like tax remittances or charge exorbitant fees for visas or paperwork … it’s just going to deter them from applying.”

The bill, dubbed by Trump as his “one big beautiful bill”, also injects US$100 billion into Immigration and Customs Enforcement (ICE), reinforcing efforts to detain and deport undocumented immigrants – a strategy that rights groups say is fuelling fear in migrant communities.

‘State extortion’

Filipino immigrant workers and community leaders have expressed their opposition to the bill, arguing that it would have a detrimental impact on working-class Filipino families in the United States.

Jabi, a fast-food worker in the US who declined to give his last name, told This Week in Asia that the bill amounted to “state extortion”.

“It is state extortion. Migrant workers in the US are being made to live in fear from the rising wave of abductions in the name of so-called immigration enforcement, and now they are even more vulnerable to being taken advantage of by abusive employers,” he said.

“We can barely send remittances regularly without the increase, what more when it’s implemented. It’s a burden for all of us who already struggle to make a living here and also are breadwinners for our families back home.”

The bill would exact a significant toll on working-class migrants, Jabi lamented. “We struggle to survive here and have to make sure our families survive in the Philippines as well.”

Filipino-American community leader Enzo Manzano shared similar sentiments, saying that the effects of Trump’s bill would be “devastating”.

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The bill was part of a long list of actions under Trump’s administration that made it more difficult for Filipino workers to support their families in the Philippines, he said.

“Whether it’s the tariffs that the administration is proposing against the Philippines or this bill, the wallets of hard-working Filipino immigrants will be squeezed so much that they will need to cut down on their remittances,” he said.

“Trump’s actions as president have done anything but make this country a place where working-class Filipino families can thrive and achieve the American dream.”

Community leaders also warn that Filipino-Americans will reel from the bill’s impact on state-funded health insurance.

About 70 million people rely on Medicaid, with at least a quarter of Filipino households nationwide receiving a form of public insurance coverage, according to an activist from Migrante USA who asked to be identified as Melody.

Cuts to Medicaid could also affect funding for hospitals and nursing homes employing Filipino workers in the healthcare field, Melody said.

She called the attacks against the Filipino-American community “relentless and all-sided – emboldening ICE to detain and separate our families, taking away healthcare and intimidating us from seeking medical care”.

Manzano said the Trump administration “seems to be a little lost” on realising which communities “play an integral role” in contributing to the US economy.

“This is something we’ve known all along: Republicans don’t care about the real and positive impact of immigrants, but rather use them as scapegoats for all the problems that we’re dealing with as a country today,” he said.

Zarsadiaz warned that the impact of Trump’s bill was likely to be felt in the long term rather than causing immediate effects.

“I think most people are not going to feel it tomorrow, but they’re going to feel it a year or two or three from now when they start to see the diminishing quality of things less access, maybe higher prices less than their pay cheque,” he said.

Community leaders called on the Philippine government to hold dialogues with the Trump administration to express how the bill would negatively affect Filipinos in the US.

“We need a government who will stand up for the Filipino people – use [its] diplomatic power to ensure protections for Filipinos overseas while ensuring there are sustainable jobs at home to support our families – and not sell us or our country out to the US,” Melody said.

Manzano stressed the importance of Philippine officials advocating “for the predicament that Filipino workers find themselves in today”.

“The contributions of Filipino workers in the US span generations and continue to this day, while a collaborative partnership with the US is crucial for the Philippines’ success. It must be clear that there is so much more to lose if both parties do not come to a compromise and better deal,” he said.