• A bit too much fun in PH

    6
    Ben D. Kritz

    Ben D. Kritz

    In an editorial last week, the BusinessMirror took note of the unusual schedule of holidays to end the year, and suggested that perhaps the number of official holidays in the Philippines is excessive, and a burden to businesses.

    In the 12 days from December 24 through January 4, for instance, there was exactly one regular business day, on Monday December 29.

    Throughout the year there were 20 official holidays, 17 of which fell on regular business days (Monday through Friday); in addition, financial markets, banks, and many other businesses were closed two additional days due to Tropical Storms ‘Glenda’ and ‘Mario’ (on July 15 and September 19, respectively), meaning that the business year was shortened by almost an entire month in 2014.

    This year there will be 20 holidays, of which as many as 18 will fall on a regular working weekday; the specific dates for Eid’l Adha and Eid’l Fit’r have not been determined yet. In addition, tomorrow (Friday, January 9) is a special holiday in the city of Manila to mark the annual Black Nazarene rites, and January 15, 16 and 19 (Thursday, Friday, and Monday) are holidays for the entire NCR due to the upcoming visit of Pope Francis, although fortunately Malacañang has apparently not decided to extend those holidays to the entire country. A Manila-based business, therefore, could lose 20 to 24 days of business in 2015, compared to 19 to 21 days in 2014.

    We can perhaps place the special holidays marking the Pope’s visit in the “grin and bear it” category, as it is legitimately a special occasion; the Pontiff graces these shores about once a generation. The number of holidays apart from that, however, is nearly the same as it was in 2010, when there were 21. Although it admittedly took some goading from exasperated business groups, President B.S. Aquino 3rd made an issue of the “excessive” number of holidays towards the end of that year, cutting down the number of holidays for 2011 to 16.

    Holidays are a part of the social fabric, so debating whether this occasion or that one “deserves” to be a civically-recognized holiday is challenging, and probably best avoided. The economic arguments for and against holidays are perhaps a little more productive: On the one hand, holidays, particularly those that create “long weekends,” are assumed to help boost the economy by encouraging domestic tourism and leisure spending. On the other, holidays burden employers with extra payroll costs thanks to the needlessly confusing wage regulations imposed by the Department of Labor (see graphic), impose transaction delays and other disruptions, and reduce the number of revenue days for many businesses.

    The anecdotal evidence strongly suggests the costs outweigh the benefits, but in what specific ways and to what degree requires a proper cost-benefit analysis, something which to this writer’s knowledge, at least, has never been done. That kind of study would also help to rationalize holiday pay regulations, which are widely regarded as a factor contributing to the scale and persistence of informal employment in the Philippines.

    ben.kritz@manilatimes.net

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    6 Comments

    1. Remember its ofw’s who keep this country afloat. They only get holidays commensurate with the country they are in, which is mostly a lot less that in the philippines. I wonder what the philippines gdp would be with no ofw’s.
      & yes a guy who wrote earlier about smuggleing is also correct. Stop smuggling to help this country & it will help in more ways than one.

    2. I don’t think holidays significantly affect the GDP at all. What will affect GDP for one is smuggling, which is in the level of $20+B a year according to the IMF. If you reduce smuggling to zero, without spending the dollars saved, you will reduce the GDP by a ton Im sure. That means smuggling is a major contributor to economic growth but no self respecting economist will agree to that. Why don’t we just encourage more smuggling to produce growth to produce prosperity for the people? Thats more productive than studying the economic effects of holidays, or am I applying the wrong economic logic here?

      • Smuggling distorts your economy and it rewards crooks and criminals instead of honest players. Such a policy would increase criminality and make it very unattractive to abide by the law. As a matter of fact the PH economy suffers already under this distortion. Many laws are not enforced and powerful (rich!) criminal operators distort the entire economy in PH (i.e. onion and garlic market manipulation). Persistent and very visible corruption is shredding the reputation of the country and it favors only a small elite and their criminal cohorts. So my opinion is that you apply the wrong economic logic.

    3. All these holidays are a perfect excuse for our lazy president not to do his job. He often reports for work late. Takes long lunch breaks. There are stories that he leaves for the weekend on Thursday or Friday–his Ate Ballsy mans the office while he’s cocooned in Luisita playing PSP and smoking and listening to his old tapes. We never ever see him work on weekends.

    4. THE PRICE OF CRUDE OIL IS DOWN, SAME WITH NATURAL GAS WHICH IS PEGGED TO DIESEL OR SOME OTHER FRACTION OF CRUDE,,,,,,,,SHOULD NOT THE POWER PRICES FROM ALL THE POWER PLANTS USING MALAMPAYA GAS GO DOWN SUBSTANTIALLY BY NOW ?
      ARE THEY BOO OR BOT ?
      DOES NOT THE NATIONAL POWER SUPPLY THEM THE FUEL /?
      COAL IS ALSO DOWN SO POWER RATES SHOULD GO DOWN NOT UP,,,,,,THESE ARE ALSO BOO AND BOT…
      LETS GET AN EXPLANATION !

    5. this is an excellent article and surfaces an underlying culture of “too much celebration” in the Philippines.

      hopefully this article will open a discussion of “where do we go from here”