HANOI, Vietnam (AP) — Economists say overseas remittances to Vietnam have fallen in the past year and could take a larger hit in the future from tighter U.S. immigration policies.
According to government figures, remittances to the Communist country from Vietnamese working in the U.S. and other countries increased steadily over the past 20 years to a record $13.2 billion in 2015 before falling to $9 billion last year.
Economist Nguyen Minh Phong said Thursday that last year's decline in remittances from the U.S. mainly resulted from Vietnam cutting interest rates to about 0 percent from 5 or 6 percent. The lower yields on bank savings offer less incentive for sending money back.
Nearly half of the 4.5 million Vietnamese living overseas reside in the United States. They sent about 60 percent of the total remittances home.
Credit Suisse said in a report released this week that tighter border controls imposed by the administration of President Donald Trump could reduce remittances equivalent to 0.4 percent of Vietnam's GDP.
Such changes would reduce remittances to the Philippines by 0.2 percent and to India by 0.1 percent.
"Vietnam and the Philippines face higher negative impact on GDP growth, given their relative high reliance on remittances to fund growth," the report said.
Many developing countries in Asia and elsewhere rely heavily on earnings from overseas workers or those who have migrated to wealthier countries.
Remittances from the U.S account for 4 percent of Vietnam's GDP, its total economic activity, and 3.0 percent of GDP in the Philippines, the report said.
It said property markets and retailing would be the most affected.
Tighter restrictions on immigration would mainly affect illegal immigrants and those with work visas, especially holders. They account for up to 38 percent of all workers in the U.S. from the Philippines, Vietnam and India.
Half of Indian overseas workers are employed in the Middle East, so restrictions would have relatively less impact.