BY THE MALAYA BUSINESS TEAM
Filipino households have been leaning more heavily on cash sent home by family members overseas, as a recent survey shows, but analysts warned such dependence may soon be misplaced given the looming headwinds against remittance inflows.
The Bangko Sentral ng Pilipinas (BSP) said it expects cash remittances to grow by just 2.8 percent in 2025, slower than last year’s 3 percent, as economic uncertainty mounts amid growing geopolitical tensions, tighter immigration rules, and a new wave of protectionist United States trade policies.
As of end-April, Filipino remittances from the US continued to account for more than 40 percent of total remittances.
New data will be released on July 15.
“Remittances remain a lifeline,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said. “They’re not only a key source of foreign exchange, but also support household consumption, real estate purchases, private schooling, and even investment decisions.”
Behind Filipino spending
The BSP’s latest Consumer Expectations Survey showed nearly all Overseas Filipino Workers (OFW) households were using their remittances for daily essentials such as food and utilities.
In the second quarter this year, the survey said 319 of surveyed households receiving remittances utilized 96.2 percent on food and other household needs. The proportion is broken down into: 55.5 percent for medical expenses and 35.7 percent for savings. Both were higher compared with the first-quarter 2025 survey.
Fewer OFW households used a portion of their remittances for other expenses, the BSP said. About 69.3 percent of remittances were spent on education; 20.7 percent for the purchase of consumer durables; 10.3 percent to buy a house; 8.2 percent to buy motor vehicles; and 6 percent for investments. These are lower compared with the previous survey.
In most cases, each household receives between $500 and $1,000 monthly—a sum that shapes the economic landscape far beyond the dinner table.
The World Bank attributes the decline in poverty—to 15.5 percent in 2023 from 18.1 percent in 2021—in part to remittance flows and expanding domestic employment. Meanwhile, real wages have risen by 24 percent since 2010.
Slowdown looms
These hard-earned gains could be facing pressure, analysts warned.
The Trump campaign has doubled down on immigration crackdowns and “America First” trade policies, including a proposed 3.5 percent tax on remittances sent by non-citizens.
Analysts said that could shrink inflows from the US, the Philippines’ largest source of overseas fund transfers.
“Trump’s track record shows he opens with aggressive trade moves—tariffs, immigration blocks—before sometimes backpedaling. But even so, the uncertainty alone can weigh on remittance volume,” Ricafort said.
He warned that global economic friction, whether from tariff wars or regional conflict zones like Israel-Iran or Ukraine, poses further risk.
Senior adviser Jonathan Ravelas of Reyes Tacandong & Co. called it “probable” that US protectionism would dampen future remittances. But he said any new tax would mostly affect temporary US visa holders, not dual citizens or permanent residents, making the impact “slow but manageable.”
Resilient, but not untouchable
Despite the storm signals, remittances have remained one of the country’s most consistent economic engines—growing at an average of 3 percent annually for the past decade.
In 2024, the Philippines ranked fourth globally in total remittances among low- and middle-income countries, behind India, Mexico and China. Last year alone, cash remittances coursed through banks hit $34.5 billion.
The BSP projects that figure to climb to $35.5 billion in 2025 and reach $36.5 billion in 2026. It credited stable labor demand, an aging global population, and improved digital remittance systems for helping offset protectionist drag.
With more than 40 percent of all Philippine remittances still coming from the US, followed by Singapore, Saudi Arabia and Japan, the country’s economic tether to its diaspora remains both powerful and vulnerable.
As Ricafort put it: “Remittances continue to provide a crucial buffer against trade deficits—but in this environment, even lifelines can be strained.” — Lee Chipongian and Ruelle Castro
