The Economics of Non-working Holidays in the Philippines

The Philippines has more non-working holidays when compared to other ASEAN nations. This year alone will see 20 public holidays, with the National Capital Region (NCR) earning an additional five-day reprieve for the Papal Visit back in January and the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit. The number of 20 holidays doesn’t include local holidays on a municipal, city, or provincial level, nor does it include the loss of working days due to inclement weather, which is often an issue here in terms of flooding caused by heavy rains, and relatively regular typhoons (hurricanes). In comparison, the nation’s ASEAN neighbors have a significantly lower number of non-working holidays, with Australia having only eight, Singapore, 11, and Japan, 15.

Having this many holidays has both a positive and negative impact on the Philippine economy. For example, domestic tourism sees a considerable increase over long weekends, as people take advantage of the opportunity to pursue much-awaited holidays. This obviously increases the revenues of local establishments that cater to such tourists, such as resorts, restaurants, and spa centers, among many others, with local staff having the opportunity to double their income on a long weekend. It also temporarily provides jobs for those in the provinces, as establishments need to hire more employees to handle the influx of visitors that are in town for the holidays. It also bolsters domestic consumption with people far more likely to be spending within local communities during holidays as they wile away their time in malls and other local establishments.

As with most things in life, while the majority of employees rejoice over the announcement of a long weekend, there are downsides to having too many non-working days; days that were initially designated to any given company’s production timeline. For instance, small- to medium-enterprises (SMEs) have to bear additional costs should they require their employees to come in during a previously unexpected non-working holiday to keep up with their production demands if they want to continue regular operations for that day. This is a blow to budgets that they did not foresee when they plotted the budget for specific projects. While there could be buffers for the budget, the fact remains that if a small operation cannot find the means to pay for additional labor thanks to the holiday, they will have to cut costs in other areas, which oftentimes results in the reduction of the workforce.

Then there are the employees who actually need to work each and every day – employees that will lose the much-needed opportunity to earn the day’s wage if their regular working day is converted to a holiday, as they work on a “no work, no pay” basis. The majority of businesses that take on these employees would prefer to forego their production for the day rather than shell out twice the amount they would normally have to pay for a day’s work.

The bottom line, then, is finding the right balance between keeping up production and keeping operational expenses down.

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JustPayroll Team