It’s the long weekend!
One of the very few long weekends we have for 2011. The previous and current administrations have different takes on holidays falling on weekends, the previous one in favor of moving these to the nearest weekdays (to extend the weekend) while the present administration deciding to keep the holidays as is, when is — whether weekends or weekdays, effectively lessening the long weekends we used to enjoy throughout the year.
The previous administration used to dub this as holiday economics with the intention of extending the holidays, to supposedly promote tourism and more spending from the public. Being the family-oriented Filipinos that we are, the expected natural tendency will then be to spend more time with the family during these long weekends, whether we go to our provinces, or take our families out to tourist destinations or even malls.
Obviously, the present administration has a different take on it. So what are the benefits and disadvantages of holiday economics anyway? Allow me to share a few below.
Employed: To those who have fixed monthly salaries, regardless of the number of days worked, this is definitely a plus since we get another day free from work, but paid nonetheless. We get an extra day to rest, be with our loved ones, and take a vacation without using up our vacation leaves. This is more special than an ordinary weekend since the extra-long weekend enables us to take extended vacations as well. We can go to farther places than we usually do. Meanwhile, to those who still need to report to work during the declared holidays, this means extra income since working on a holiday mandates OT and holiday pay.
Businesses: Reaction of businesses will generally be mixed, depends on what type of business they are in. I recall though that a business group actually raised its sentiments not in favor of the holiday economics. For manufacturing and servicing companies, this will mean less productive days in a month to fulfill job orders, to meet demand, quotas etc. Further, for banks, this means there will be less days to collect payments from its customers, which may increase its provision requirements and non-performing loans. For retail and wholesale businesses meanwhile who are open during the holidays, this shall be good since there will be more customers to shop and visit their establishments. In fact, I will not be surprised if they even declare 3-day sales during these dates. But regardless of business, more holidays actually mean more costs for business owners since either they pay their employees even if they don’t report for work, or they pay extra to their employees who report for holiday work.
Government: Similar to businesses, productivity and provision of government services will definitely be delayed (or rather more delayed) due to the holidays. Permits, transactions, applications, and processes that should have been done on Monday will have to wait until Wednesday. Enactment of laws, court decisions, and sessions to create more laws will have to wait as well. And since government transactions are very crucial parts of our economic processes, this may have a snowball effect in the other services that pass through the government. Delayed permits means delayed opening of a store for example, or delayed start of a construction, or delayed completion of a deal, etc.
Traffic: If you are among those people who wanted to start their long weekend as early as possible, then chances are you started it on the road, stuck with heavy traffic. Since you are not the only wise Juan around, everybody actually wanted to have an early long weekend, as such the rush hour away from the offices starts early. Just like me, I’m stuck in traffic right now as I draft this post. But over the weekend, and if we’re lucky enough, we might actually experience extra light traffic in our major thoroughfares. Assuming of course that everybody else is out of town. But wait until the long weekend is about to end, thousands once again will migrate back to the metropolis.
Banks: Credit card issuers might be happy since long weekends usually spur spending so extra swipes will be very much appreciated. They have to note though the previous concern raised above on being able to collect. Especially this long weekend which falls very precariously near the month-end (and payday), collections efforts really must be revved up, otherwise they will end up with lots of uncollected credit as the month closes. On the other hand, ATMs must be readied and loaded as well since lots of people will definitely need cash, but the banks will usually be closed on a holiday, so where else to go to but the ATMs.
Stock Market: Today’s market trading was very cautious as expected. In fact, the PSE lost some points as the market closed for the weekends. Why is this so? It is because the market does not want to be caught unprepared in case something bad happens to the international markets. Long weekends are taken with precaution because our local stock market will be closed while the international markets will still be open tonight, Monday night, and possibly even Tuesday night. Investors will not be able to react with any bad news or market movements out there. So they’d rather stay out, at least over the weekend. And staying out means selling their holdings. This is what we saw in today’s market.
The above are just a few of the effects of holidays to our economy, whether micro or macro. As to how the effects are computed and quantified, I leave it to our qualified government officials and economists to check. Most probably, the number of long weekends we enjoyed the last few years gave more harm than benefit, at least based on the eyes of the current administration that is why they significantly lessened the long weekends this year.
Or maybe, just maybe, this just want to veer away from the practices of the previous administration.