Long holidays hurt the nation’s future

I am glad that Secretary Alfredo Pascual of Trade and Industry has spoken on the issue of long holidays.

I have written several columns on this topic. I therefore find it useful to reproduce, with more relevant up-to-date edits, the column that I wrote more than a decade ago, on Jan. 26, 2011. Here it is below:

Holidays and national development

A new cycle of holidays will start in this new year, 2011. Our country has more holidays than most countries, and some of them happen at the spur of presidential decision.

I had a good education on this issue a few years back, but learned about the problem only indirectly.

During the first year after the birth of our republic, the US government passed a law to make war damage payments for the destruction caused by war as a consequence of the Second World War. To implement the war damage act, this law created a Joint US-Philippine War Damage Commission.

The implementing administrative body for this law involved two independent governments – the United States and the new Philippine republic. As such, one of their problem was to observe the respective holidays of each government when they opened for business.

The first meeting of the joint commission was on the subject of the working days of the new government body. It was a mixed body that had to respect two country’s holiday traditions. In this way, the joint commission was able to decide on the working days of this new, but temporary body. The national holidays of both countries had to be respected.

It turned out that the national holidays of both the United States and the newly independent Philippine republic were almost identical in number ,but they did not coincide in the calendar. So the working days of the commission stretched to the sum of two holiday systems. The Philippines had a more open-ended system.

In the Philippine case, a special holiday could be declared by the president of the country. There was no specific limitation on the number of such special holidays that he could declare. On the other hand, the holidays enjoyed by the US were determined and fixed by their Congress and could not be altered by the US president. The US had a complete listing of the holidays, which were fixed by the US Congress by law.

Unlike many other democracies, the Philippine president has delegated authority to declare holidays as he saw fit. Over the years of independence, this privilege given to the president has been abused. With each passing president there were pressures to declare special holidays of occasions that any pressure group had identified as meritorious and deserving as a national holiday. Thus, presidents who were therefore impressed or convinced of the need yielded to the pressure.

The idea of “holiday economics” is mis-directed. It encourages a culture of holidays: slack, indiscipline, and love of leisure among workers. The justification would have accustomed Filipinos with love of work slack, probably low productivity and in general work indiscipline.

The net effect of “holiday economics” is to create a high labor cost economy. This is yet another cause of high labor costs in the country. Holidays require – by law and regulation – higher pay for work. Yet, there are so many people left without jobs who would rather work than play.

Further, when the president declares certain special holidays as “working or non-working,” it is to institute a kind of arbitrary judgment on the planning for production programming of the private sector. The worst part of it is that the special holidays are given as official surprises, often being announced within the week.

In most societies, the holidays are pre-ordained. They create no uncertainty. They are grist for year long planning of production and for human resources planners in the business sector.

It is, therefore, not surprising that the Philippines would end up having more national holidays than most countries. Although declared holidays are actually calendared and, therefore, are quite transparent to most, the use of the power of the president to declare special holidays is not.

To deal effectively with the problem of excess and unexpected holidays, the presidential discretion to declare holidays needs to be dispensed with.

To implement this, the president has to ask Congress to provide a strict limitation on the number of special holidays that the president could declare in any given year if not to abolish that privilege entirely. It might be best to leave the matter of choosing holidays to Congress.

Holidays are days of rest and play for a nation. The holiday composition is the result of compromises that happen among patriotic, civic, religious, cultural, and historical sectors of the nation as they choose the appropriate days in which work stoppage is observed. Some countries provide for a sufficient mix of long holidays and important civic and politically important national holidays.

In the Philippines, for instance, the Christmas season, including the New Year, marks a long period that already takes into account religious and civic demands. National elections also provide an opportunity to stop ordinary business work. In the US though, Christmas day is a holiday, the key days of the Good Friday week are normal working days. In Japan, there is a long week called the “spring holiday” when the nation stops cold and almost every one is on a holiday.

In making those decisions on the number of holidays, nations ordinarily take into account only their internal wants. But the countries that are engaged heavily in international commerce choose their days of rest partly in awareness of what other countries – especially their competitors – also do.

Thus, it may be safe to say that the international norm – the average number of official holidays of the most similar nations – would provide a good benchmark for setting the upper limit for the number of national holidays. For their own holidays represent a cost in their operational efficiency as work places.

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I must add that this was not the only time I commented on our long holidays. I wrote another column on Jan. 29, 2014, “Surprise holidays promote a culture of fiestas and siestas.”

On Oct. 26, 2015, my column title was “Excessive public holidays hurt the economy and the financial system.” In that column I stressed the problem of our banks being closed for business and the world around cannot do business with us.

For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat . Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/