Central America most exposed to a US remittance tax

The proposed 5% US tax on remittance outflows would have a particularly large negative impact on Central American economies such as Honduras, Guatemala and El Salvador. Remittance flows could plausibly drop by around 1% of GDP in these countries. And rigid exchange rate regimes would limit their ability to adjust to a loss of hard currency income. Among the larger EMs, there could be a discernible effect on Mexico and the Philippines.