April 2, 2017 10:00 am JST

Filipinos fret as a key lifeline comes under threat

Tougher immigration rules could squeeze remittances from the US

CLIFF VENZON, Nikkei staff writer

MANILA -- When Maria's father realized last year that Donald Trump was going to be the next U.S. president, he knew the time had come to pull the trigger.

"He had always thought of resorting to a fixed marriage. But [the rise of] Trump pushed him to finally go for it," the 27-year-old accounting clerk, who lives about 80km north of Manila, told Nikkei Asian Review.

She was referring to the practice of arranging a fake marriage with an American for the purpose of obtaining a green card.

Maria's father, a warehouse supervisor in the U.S., had been hiding from immigration authorities for the past 13 years. In 2004, he left his office job at a Philippine state-owned company and headed for the U.S. to raise money for his two children's college education. Maria's mother stayed behind in the Philippines, where she works as a clerk at a government office. Five years ago, she flew to the States to divorce her husband so that he could arrange a new marriage when the time was right.

In early March, Maria's father, who is now 50, was formally granted immigrant status after marrying an American citizen last year. Maria said they racked up a bill of over $5,000 for the local immigration lawyer alone -- a hefty amount, she admitted, but worth every penny if it means avoiding deportation.

Being able to stay means he can keep sending about 70,000 pesos ($1,390) home every month, or more than half of the family's household income.

Of the roughly 3.5 million Philippine nationals living in the U.S., some 300,000 are undocumented.

Next on the list?

Trump's immigration crackdown, which began with an executive order targeting seven Muslim-majority countries, is making people nervous in the Philippines. Though the country is not among the nations on Trump's list, the U.S. State Department has labeled the southern Philippines island of Mindanao a "safe haven" for terrorists.

Should the country be included in an expanded immigration clampdown, it could squeeze the huge flow of money being sent back to the islands from Filipinos working in the U.S. In 2016, remittances from the U.S. came to $8.9 billion, or a third of the total.

Immediately after Trump's victory in November, economists at Japanese financial company Nomura said his stricter immigration and protectionist policies "could hurt both the Philippines' current account surplus and domestic demand via lower overseas workers remittances."

The Philippines has had one of Asia's fastest-growing economies in recent years. Driving that growth to a large degree have been remittances and the $23 billion-a-year business process outsourcing industry -- supported mainly by U.S. companies.

While the tightening immigration rules may have little impact on Filipinos living in the U.S. legally, they may face a new tax hurdle. "If the U.S. were to press ahead with a tax on remittances, which it has already threatened to do against Mexico, it could cause remittances growth to slow sharply," London-based Capital Economics said in a recent report.

As it stands, the Philippines can ill afford a further erosion in its sources of U.S. dollars. A swelling trade deficit caused its current account surplus to plunge by 91.7% on the year to $601 million in 2016. As of the end of last year, the country's current account balance had narrowed to 0.2% of gross domestic product from 2.5% in 2015.

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

Resubscribe now to continue reading.
BEST OFFER:
Only US$ 9.99 per month for a full-year subscription

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.