Remittances have become an important financial source of Vietnam and have exceeded US$10 billion annually in recent years.
With the mobilization of remittances through bond issues, overseas Vietnamese will be entitled to stable interest rates and an exemption of taxes on their interest and can take back their principal after the investment, Dr. Tran Phuong Tra, director of the business administration program at France’s IPAG Business School, said at the seminar held by the Overseas Vietnamese Committee of Ho Chi Minh City to seek comments on a plan to build policies to attract and optimize remittance resources in Ho Chi Minh City.
Tran Tue Tri, a Vietnamese in Singapore, suggested that local authorities learn from other countries’ experience in establishing funds from remittances, such as real estate remittance funds and remittance funds supporting small and medium production facilities.
Vietnam attracted nearly $19 billion in remittances last year, meaning that a Vietnamese abroad sent home around $4,000 on average, equivalent to Vietnam’s GDP per capita in 2022, at $4,163, said economic expert Nguyen Tri Hieu.
However, remittances may fall this year due to the global economic downturn, Hieu forecast.
“The governments of many countries have kept tightening their monetary policies and hiked interest rates to keep inflation under control. Increasing living costs will reduce overseas Vietnamese’s redundant incomes to send home,” the economist analyzed.
Therefore, the city must improve its macro-economy to bolster overseas Vietnamese people’s confidence in its development and investment opportunities.
It should extend the tax-free policy for remittances and allow recipients to keep foreign currencies or make deposits in foreign currencies at credit institutions.
Overseas Vietnamese also hoped remittance-related services to improve to facilitate residents in Vietnam receiving remittances.
Modern methods, such as e-wallets, QR codes, and electronic money transfer services should be applied.
Remittances flowing to the metropolis grew an average of 7.6 percent per year over the past five years, said Nguyen Duc Lenh, deputy director of the State Bank of Vietnam’s Ho Chi Minh City Branch.
The city’s target of an average remittance growth rate of 10 percent per year in 2023-30 is attainable, Lenh added.
To reach the target, the municipal People’s Committee has required developing a plan to build policies to attract and optimize remittance resources in Ho Chi Minh City.
The plan should include specific objectives in remittance growth and the execution of social, education, healthcare, and environment projects using remittances as well as involve Vietnamese people living and working in other countries.
Incoming remittances to Ho Chi Minh City in the first quarter of this year surpassed $2.1 billion, up over 19 percent against the same period last year and equivalent to roughly 32 percent of the 2022 figure, at more than $6.6 billion.
Vietnam was among the world’s top 10 remittance recipients last year.
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