Real estate prospects clouded by new US tax on remittances

The US decision to impose a 1% remittance tax could serve to dampen property investing activity by overseas Filipino workers (OFWs), industry analysts said.

The remittance tax, a component of the Trump administration’s “One Big Beautiful Bill,” will crowd out any OFW funds earmarked for investing and shift priorities towards essentials, they said.

“While the percentage of remittances being allocated for real estate requirements is increasing, that additional tax will likely affect the inflow of remittances from Filipinos working abroad,” Colliers Philippines Director and Head of Research Joey Roi H. Bondoc said in an interview.

“This might affect the money being set aside for real estate purchases. The lower the remittances, the less will be spent for these discretionary purchases, especially in the luxury segment.”

Remittances could dip between $19.1 million and $148.4 million as a result of the tax, the Department of Finance estimated, describing these movements as having a “minimal” effect on the economy.

OFWs are a key segment of the property market, with many turning to real estate for investment income or to upgrade the living conditions of their families back home.

The decline in money sent home by OFWs would affect demand for the industry’s residential and retail offerings, Santos Knight Frank Associate Director Toby Miranda said.

“OFWs are major demand drivers of residential products, and if they were to send less money, there may be a higher risk of canceled purchases,” he said.

“Remittances from OFWs also impact the purchasing power of their families so retail demand may be impacted,” Mr. Miranda added.

Mr. Bondoc noted that Europe-based OFWs are a strong market for upscale and upper middle-income residential units, while luxury residential units are attractive to Filipinos working in Abu Dhabi.

US President Donald J. Trump on July 4 signed into law the One Big Beautiful Bill, essentially a tax bill that overhauls tax rates and spending. The 1% excise tax on all remittances represents a softening of the bill’s initial proposal to charge remittances by foreign workers 3.5%.

“Given the uncertainties in the global and domestic market, they (OFWs) might have to put these big-ticket purchases on hold, and perhaps wait a little longer before they finally acquire these residential units that they’ve been aspiring for,” Mr. Bondoc said.

Source: Business World

Cash remittances up 2.9% in May

Money sent home by overseas Filipino workers (OFWs) rose in May compared to a year earlier, Bangko Sentral ng Pilipinas (BSP) data showed.

At $2.971 billion, personal remittances were 3.0 percent higher than the $2.884 billion recorded in the same month last year. It was slightly lower, however, compared to the $2.975 billion posted in April.

Growth, meanwhile, was also slower than the year-to-date high of 4.1 percent in April and the 3.7 percent seen in May last year.

The latest monthly count pushed the January-May remittances tally to $15.343 billion, up 3.0 percent from the $14.89 billion recorded in the same period last year.

In May alone, money sent home via banks totaled $2.658 billion, 2.9 percent more than the $2.583 billion posted a year earlier. Again, it was slightly lower than April’s $2.664 billion.

Source: Business World

Growth also slowed from 4.0 percent a month earlier and 3.6 percent in May 2024.

Year to date, cash remittances totaled $13.766 billion, up 3.0 percent from the $13.365 billion recorded in January-May last year.

The United States continued to account for the biggest share of overall remittances at 40.2 percent, followed by Singapore (7.4 percent), Saudi Arabia (6.4 percent), Japan (5.0 percent) and the United Kingdom (4.6 percent).

Rounding out the top 10 were the United Arab Emirates (4.2 percent), Canada (3.3 percent), Qatar (2.9 percent), South Korea (2.8 percent) and Taiwan (2.7 percent).

Remittance data by source has limitations, the BSP noted, with the US appearing to be the main origin, as remittance centers in cities abroad commonly course the money through correspondent banks that are mostly located in the US.

Asked to comment, Reyes Tacandong & Co. senior adviser Jonathan Ravelas said that 3.0-percent remittances growth could be sustained this year given continued demand for Filipino workers abroad.

Other markets, such as the European Union and Southeast Asian neighbors, should be pushed, however, he said, otherwise growth could slow to 2.70 percent.

OFW remittances totaled $38.341 billion last year, up 3.0 percent from $37.21 billion in 2023. Based on the latest balance of payments forecasts from the BSP, remittances for this year and the next year will likely be lower at $35.5 billion and $36.5 billion, respectively.

Source: Manila Times

Controlling inflation remains top concern for Filipinos —survey

Controlling the increasing prices of basic goods and services is on top of the list of issues that Filipinos want President Ferdinand ''Bongbong'' Marcos Jr. to include in his fourth State of the Nation Address (SONA), results of the Pulse Asia survey showed.

The survey indicated that 32.9% of Filipinos would like the President to talk about measures to control inflation. Addressing inflation was the leading issue identified by Metro Manilans (37.8%), Visayans (44.7%), and those in Class D (34.2%).

Inflation is the rate at which the general level of prices of goods and services increases. Its computation is based on the Consumer Price Index (CPI).

Meanwhile, 13.6% of the adult population would like Marcos to discuss either increasing wages, while 13.2% want him to talk about peace and order. 

The survey also showed the other issues cited by the respondents. The list includes the following: expanding employment/livelihood opportunities (9.8%); reducing poverty/hunger (7.4%); extending assistance to the agricultural sector (4.1%); continuing financial aid programs (2.8%); eliminating corruption (2.4%); the return of former President Rodrigo Duterte to the Philippines (2.3%); protection of the country’s maritime rights in the West Philippine Sea (1.6%); solutions to education concerns (1.3%); and ensuring justice in the country (1.1%).

Further, in the rest of Luzon, inflation and wages are the top issues (28.8% and 19.0% respectively) that the public wants Marcos to discuss, while Mindanaoans would most like him to talk about peace and order (31.3%) and inflation (28.8%).

The survey was conducted from June 26 to 30, 2025, using face-to-face interviews. 

The nationwide poll is based on a sample of 1,200 representative adults 18 years old and above, Pulse Asia said. 

It has a ± 2.8% error margin at the 95% confidence level.

Marcos is already preparing for his fourth SONA scheduled on July 28, according to Palace Press Officer Undersecretary Atty. Claire Castro. —LDF, GMA Integrated News

Source: GMA News Online.