The U.S. government is reportedly weighing a proposal to impose a 5% tax on outbound remittances — a move that could ripple across global economies and hit millions of families in the Philippines, where remittances make up nearly 10% of the country’s GDP.
For decades, overseas Filipino workers (OFWs) and other migrants have sent money home without facing a tax from the U.S. side. These remittances are more than just cash transfers — they are lifelines that fund groceries, tuition, rent, medicine, and more.
If the proposed tax is implemented, a $1,000 remittance would come with a $50 tax, on top of the already significant fees and currency exchange spreads charged by traditional remittance providers. This would make it materially more expensive to support loved ones — especially for lower-income workers sending money home regularly.
The Philippines is among the world’s most remittance-dependent countries. In 2023 alone, over $36 billion was sent home, mostly from the U.S., the Middle East, and Europe. The money fuels not just household budgets, but also national consumption, education, and housing.
A 5% U.S. tax could shrink the total value reaching Filipino families, and in turn, slow down local economic activity in communities across the country.
While traditional remittance channels like banks, Western Union, and apps like Remitly may be forced to comply with such a tax, Bitcoin-based remittances may not be subject to the same rules.
Bitcoin allows anyone to send value peer-to-peer across borders — no banks, no intermediaries, and no centralized system that can be taxed at the point of transmission. This makes it a potential workaround, or at least a competitive alternative, to taxed remittance rails.
Apps built on the Bitcoin Lightning Network are already gaining traction for cross-border payments. Some fintech platforms allow U.S. users to buy Bitcoin with dollars, send it instantly to the Philippines, and convert it to pesos on the other end — often in minutes and with near-zero fees.
If a remittance tax is enforced, expect Bitcoin adoption to accelerate, not out of speculation, but out of practical necessity.
This isn’t just a policy debate — it’s a real-world issue that affects families trying to make ends meet. Whether or not the tax becomes law, it’s a wake-up call: the cost of sending money home is still too high, and new technologies like Bitcoin are increasingly not just alternatives, but imparatives.
