Trump's immigration rules threaten remittances to Vietnam

Vietnam's remittances from the U.S. made up 4 percent of the country's gross domestic product in 2016.

Overseas remittances to Vietnam witnessed a fall in the past year, and the trend could continue due to tighter U.S. immigration policies, according to a recent report issued by Credit Suisse.

Remittances inflows to Vietnam have grown consistently since 2010 and hit a record of $13.2 billion in 2015 before falling by about 33 percent last year.

Vietnam's annual remittance 2010-2016 (source: vnexpress)

The decline in remittances mainly resulted from Vietnam cutting interest on foreign currency savings to around 0 percent from the beginning of the year. Lower yields offer less incentive for sending money back, Economist Nguyen Minh Phong told AP.

But the interest rate cut wasn't the only reason.

Half of overseas Vietnamese reside in the U.S., according to official data. As such, around 60 percent of Vietnam's remittances come from the U.S., a contribution that represents 4 percent of the country’s GDP in 2016.

Tighter border controls imposed by the Trump Administration could literally decimate remittances, Credit Suisse warned in a report that came out this week.

Vietnam is not the only one affected by such changes, the Philippines and India stand to suffer as well.

Trump's tightening of restrictions on immigration would mainly affect work visa holders, of which workers from the Philippines, Vietnam and India make up nearly 40 percent according to the findings./.

( VNF/VNE )