By Katherine K. chan
Demand may slow due to strict visa and immigration policies in the United States Analysts said the flow of Filipino workers and remittances likely declined.
Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said the weak US labor market has begun to impact remittances from US-based overseas Filipino workers.
“We are certainly already starting to see a softening of the US job market which is having an impact on remittances coming from Filipinos there,” Mr Chanco said. businessworld In an e-mail.
He said growth in remittances from US-based Filipinos slowed to 0.5% in August, “much lower than its previous peak of 4.2% in the middle of last year.”
“This ongoing slowdown certainly poses downside risks to the 3% growth projection for BSP (Bangko Sentral ng Pilipinas) remittances,” he said.
In August, cash remittances rose 3.2% to $2.977 billion from $2.885 billion a year earlier.
This took cumulative cash remittances in the January to August period to $22.909 billion, 3.1% higher than the $22.217 billion seen in the same period last year. Bulk of remittances or 40.4% Came from Filipino workers based in America.
The BSP estimates that cash remittances will grow 3% this year to $35.5 billion.
since acceptingFFollowing snowfall in late January, US President Donald J. Trump has tightened border enforcement, ordered a crackdown on illegal immigration and taken steps to limit foreign workers.
John Paolo R., a senior research fellow at the Philippine Institute for Development Studies. “Such policies make OFWs more cautious, possibly reducing remittance volume or remittance frequency,” Rivera said in a Viber message.
“Given that the US is a major source of Philippine remittances, these developments may make it harder to achieve the BSP's 3% growth target for remittances,” he said.
visa issue
Meanwhile, the International Monetary Fund (IMF) said the US government's move to impose a fee of $100,000 on new H-1B visas could pose a risk to remittances coming from the US.
“Tariffs on H-1B visas could have an impact on US inflows, but we do not have any specific estimates at this time,” an IMF spokesperson said. businessworld in an e-mail, saying they would monitor further developments and evaluate their impact as additional information becomes available.
In September, Mr Trump issued a proclamation requiring employers who are sponsoring foreign-born workers through H-1B work visas to pay a one-time $100,000 fee to the US government.
The H-1B visa allows foreign workers to work temporarily for US companies in industries such as science, information technology, engineering and finance. Fees are generally borne by employers.
Security Bank's head of research and chief economist Angelo B. Taningco said stricter US immigration and visa policies may have a moderate to minimal impact on the remittances of overseas Filipino workers (OFWs).
“I think remittance flows from the US to the Philippines will be modestly affected by the restrictive US immigration policy, but minimally affected by the hefty $100k H-1B visa fee because there are not very many Filipino H-1B visa applicants,” he explained. businessworld In an e-mail.
Workers from India account for the majority, or about 70%, of total H-1B visa approvals.
On the other hand, IT and Business Process Association of the Philippines President and CEO Jonathan R. According to Madrid, Filipinos hold less than 1% of the total number of H-1B visas.
However, Mr Rivera said the new visa fee could reduce remittance flows in the future by discouraging new applicants.
“The new $100,000 fee on new H-1B visa petitions increases the cost of working legally in the US, which could discourage new entrants or slow the growth of that skilled migrant stock, leading to future declines.” The volume of remittances,” he said.
Oikonomia Advisory & Research, Inc. Economist Renille Matt M. Ayres of the United States said that fewer remittances could hurt the economy. This may limit household expenses.
“Lower remittances may reflect lower disposable income of households with OFWs, thus lower disposable income may result in lower spending,” he said in a Viber message. “Lower spending results in slower jobs and income growth in the domestic economy.”
Mr Rivera also said the weak inflows could also put pressure on foreign exchange reserves and further pressure on the peso and external balance.
“The Filipino diaspora in the US is still the largest globally – by far – so I highly suspect that it will become more difficult for new entrants to come to the country in the future, which would immediately impact the US's position as the largest origin market for remittance flows,” Mr Chanco said.
“For now, with overall remittance growth remaining fairly stable at 3%, these aforementioned developments in the US should not have a significant impact on the Philippines’ growth prospects,” Mr Chanco said.
