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Over a month ago, Sen. Robinhood Padilla presided over a public hearing on bills seeking for the declaration of July 27 as a national holiday. This is, of course, in commemoration of the founding anniversary of Iglesia ni Cristo.
These two bills filed during the 19th Congress were authored by two senators. Sen. Jinggoy Estrada (Senate Bill No. 1087) was seeking that the day be considered as a “special working holiday”, while Sen. Bong Revilla (Senate Bill No. 1546) was seeking that it be a “special non-working holiday”.
This is not the first time that this proposed law was filed. Back in 2013, during the 16th Congress, Sen. Bong Revilla already filed Senate Bill No. 1016 seeking to declare July 27 as a national holiday. This bill went through first reading at the committee constitutional amendments, revision of codes and laws level, and was considered for house joint resolution (HJR-12), but somehow, the proposed law did not come to fruition that time.
So, what are the economic implications of declaring July 27 as a holiday?
Before going further, may I clarify that I am not a member of Iglesia ni Cristo. I have nothing against the said religious group. I will be avoiding the politics and religious aspects of this issue, and will be focusing on the economic perspective.
Let us first highlight the advantages. The first on the list is what was introduced by Pres. GMA then, which is holiday economics. If the day falls on a Monday or a Friday, that would result in a longer weekend. This is advantageous especially for tourism. People would have more opportunities to travel to local destinations in the country. This will increase the consumer spending on tourism, which would mean higher income for tourism-related business firms. Tourism accounts for about 6.2% of our Gross Domestic Product (GDP).
Another advantage would be for the labor force. If a holiday is “special working”, employees who report for work would get an additional 30% of their daily rate, while if the holiday is “special non-working”, employees would not have to work and still get an additional 100% of their daily rate, much like the regular holidays like Christmas day, New years day, Araw ng Kagitingan, etc. This would mean the employees would be getting higher pay as an effect of this holiday. A higher consumer household income would result in higher expenditures, which would still have an effect on our GDP.
Non-economic benefits would include opportunities for employees to have more time to rest. When employees are rested, it may result in employees being more satisfied with their jobs, thereby increasing their efficiency and productivity at work.
On the other hand, there would be disadvantages that accompany this proposal of declaring the said day as a holiday, or adding more holidays for that matter, particularly in the business sector.
Back in 2019, when there were bills filed in the Senate to declare more holidays, the Joint Foreign Chambers of the Philippines (JFC) noted that the cost of every non-working holiday in the Philippines particularly in the Business Process Outsourcing (BPO) industry is around P750 million extra expenses on overtime alone. That may be around P1 billion at present.
The JFC is a coalition of American, Australian-New Zealand, Canadian, European, Japanese, Korean Chamber of Commerce in the Philippines. They represent over 3,000 member companies engaged in over $100 billion worth of trade and more than $30 billion worth of investments in the country.
There are 20 regular and special non-working holidays (NWH) in the Philippines for 2024. Meanwhile, for other countries in the ASEAN region like Vietnam, they only have 12 NWH, Malaysia, 14, Thailand, 17, and Indonesia, 27. These are the countries that are directly in competition with us for foreign direct investments.
Meanwhile, India, our competition in the BPO industry has fewer holidays, numbering to only 17, that is why it is 15% more expensive to operate a BPO here than in India.
The more holidays we have, the higher the extra costs of doing business here in our country. This will greatly diminish the country’s competitiveness with respect to direct investments. A firm that is considering an investment location would, of course, choose a country where the costs would be lesser, among other factors that would be considered.
We also have to take into consideration the existing local and foreign firms in our country. With labor costs increasing due to more holidays, local business firms may fold up and foreign firms may seek cheaper locations which would result in job loss and unemployment.
The efforts exerted by our President Marcos, Jr. to entice firms from first world countries to invest in our country would go down the drain if we insist on declaring more holidays. There may be a need for our legislators to be reminded that their proposals affect a greater majority than those who supported them during the elections who they are trying to please.