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.