: 庞大而美好的法案与其他赤字：:

Restricted - External Shreya Sodhani+65 6308 4525shreya.sodhani@barclays.comBarclays Bank, SingaporeAmruta Ghare+91 (0) 22 6719 6074amruta.ghare@barclays.comBSIPL, IndiaBrian Tan+65 6308 5798brian.tan@barclays.comBarclays Bank, SingaporeAastha Gudwani+91 (0) 22 6719 6075aastha.gudwani@barclays.comBSIPL, IndiaBum Ki Son, CFA+ 65 6308 5291bumki.son@barclays.comBarclays Bank, SingaporeHongying Liu+65 6308 5310hongying.liu@barclays.comBarclays Bank, Singapore 1see Hurry up and wait: House passes One, Big, Beautiful Bill, 22 May 2025°ForPakistan, we estimate the proposed tax could likely reduce the pace of growth ofremittances in FY2026, however, with the GCC receipts comprising a much larger share oftotal remittances than the US, we think the current account will remain relativelysupported.One big beautiful bill's not so beautiful impact onremittancesWith the pause intariffturmoil, even if potentially shortlived, the market narrative andattention haveswiftlydriftedto the US fiscal position with the Trump administration's "One BigBeautiful Bill" passed in the House late last week1. For some Emerging Market (EM) economies,especially in Asia and Latin America, another aspect of the bill has raised concerns.The bill, if implemented, will impose a 3.5% tax on all international transfers –remittances, transfer of investment income, etc – made by non-US citizens from 1 January2026, over and above the usual fee charged by remittance platforms.This, though, is a reliefcompared with the earlier proposed 5% tax in the initialdraftof the bill. We take a look at whicheconomies in the region could particularly be exposed to the proposed tax on remittances.However, given the uncertainty around the timing of the passage of the bill and its finalimplementation, we do not incorporate the proposed tax in our baseline view.Remittance flows are a sizeable component of the secondary inflows of Emerging Asianeconomies, and partially fund their large trade deficits. According to World Bank data, Asia-Pacific received ~USD315bn of remittances in 2023. While on an absolute basis, India and thePhilippines received the largest remittance flows, as a percentage of GDP, the Philippines,Pakistan, Sri Lanka, Vietnam, Bangladesh and India are most reliant on remittance flows as animportant source of foreign exchange.FIGURE 1. South Asian economies and the Philippines and Vietnam in Asean show large remittanceflowsSource: World Bank, Barclays ResearchIndia typically receives the largest remittance flows, ~USD130bn in 2024, followed by thePhilippines where remittance flows account for nearly 8% of GDP.The exposure changesslightly for remittance inflows specifically from the US, with India, the Philippines and China stillreceiving the maximum flows.2 2Remittance Prices Worldwide Quarterly, The World Bank, Issue 51 Sep 2024FIGURE 2. Philippines, Vietnam, India and Pakistan rely on USFIGURE 3. Remittances from the US account for a significant share inthe Philippines and South Asia40.627.711.710.07.5051015202530354045PhilippinesIndia*PakistanBangladeshSri LankaShare of US in total remittances (%, 2024)World Bank bilateral remittances data are available only as of 2021India data is for FY23-24Source: Haver Analytics, RBI, CEIC, Barclays ResearchIn terms of dependence as a % of GDP, the Philippines, Vietnam, Pakistan and India relymore on remittance income from the US,while other Asean economies are relativelyinsulated. For China and Korea, while a lion's share of the remittance flows comes from the US,the small share of the total remittance income in GDP keeps them less at risk.Notably, all the economies most reliant on remittance flows have relatively large currentaccount deficitswhere remittance income is the relatively sticky portion of foreign exchangeflows, which helps narrow the large goods trade deficit. For instance, in the Philippines, whereremittances are likely the most supportive for external metrics, transfers from the US alone helpto close ~20% of the annual merchandise trade deficit. For Pakistan, US remittances amount to16% of the trade gap.Remittances also support the domestic private consumption of households in theseeconomies to varying degreeswith the Philippines'consumption closely tied to remittances ofOverseas Filipino Workers (OFWs).Cost of sending remittancesWe estimate the potential impact of the proposed US tax on remittance transfers byanalysing the relation of remittance flows with "remittance prices"which monitors the costincurred by remitters when sending money across specific corridors2. This cost includes the feeof sending money charged by service providers like agents, internet platforms, banks andexchange rate margins across platforms on a quarterly basis. The cost is reported as a percentof USD500 / USD200 used as the amount of money remitted. For simplicity, we use the % ofsending USD500 through our analysis. On an average, South Asia is the lowest cost receivingregion as per the World Bank, within which India