Holiday overload

In last week’s article (There’s More in the Philippines!, Jan. 13, 2014), we wrote that 2014 had the longest Christmas holiday in recent memory. Based on the latest presidential proclamation, this year’s Christmas vacation from Dec. 24, 2014 to Jan. 4, 2015 will be interrupted by only two working days.

Listed below are the other official holidays for 2014, including those in the two-week period described above.

* List does not include Eid’l Fitr and Eidul Adha which have yet to be given an exact date.

As you can see from the table above, from Dec. 24 up to Jan. 4, the only working days will be Dec. 29 and Jan. 2, thereby giving workers in the financial sector 10 days of vacation.

Holiday economics

If you look at the list above, some holidays have been moved from their original dates, such as National Heroes Day, while Dec. 26 has been declared as a non-working day. This was purposely done in line with the principle of “holiday economics,” a policy former President Gloria Macapagal-Arroyo introduced in 2001. In implementing this policy, holidays were moved to the nearest Friday or Monday to encourage domestic tourism and give employees long weekends to enjoy.

Too much of a good thing

While holiday economics is a good thing, too much of a good thing is a bad thing. Long weekends give us time to rest and spend quality time with our families, but it comes at a cost. The sheer number of non-working holidays will have an impact on worker productivity and, as a result, GDP as well. The government should seriously consider the economic impact of declaring too many holidays moving forward. There will be higher costs for businesses, especially those that are labor-intensive. Business disruptions will also have a significant impact on the manufacturing sector which relies on continuous operations.

All play and no work makes Jack a lazy boy

Long holidays tend to encourage absenteeism. Faced with the prospect of a 12-day long vacation, it is very tempting for employees not to go to work on Dec. 29 and Jan. 2. A popular proverb goes this way –  “All work and no play makes Jack a dull boy.” On the other hand, we believe that “all play and no work makes Jack a lazy boy.”

Skipping the best part

It is not just businesses that are affected by holidays, but the stock market as well. Trading at yearend and at the start of the year are the most active in terms of volume and price action. The last two weeks of December are very important because of squaring of books, portfolio realignment of fund managers, realization of gains and losses, and window dressing. The beginning of the year also sees some continuation of asset allocation and deployment of new funds. Given all these, it is imperative that markets remain open to take advantage of these important activities. Unfortunately, our stock market will only have two trading days in this crucial period.

Trading on declared holidays

Some countries allow stock trading during declared holidays. For instance, Columbus Day and Veterans’ Day are legal holidays in the US and yet trading continues in the exchanges. While trading is allowed on bank holidays, clearing and settlement is fixed on the next working day instead.

December 24, 26, 30 and 31 will also see unabated trading in the US, unlike here. While our long vacation at the end of 2014 has only two working days, the same period in the US features only two holidays, a stark contrast.

Holiday trading – a policy matter

Trading during declared holidays is a policy that stockbrokers and the PSE Board of Directors, headed by chairman Jose Pardo, president Hans Sicat and dragon Lady Vivian Yuchengco should seriously study. As a first step, they should consider is allowing trading on Dec. 26 and 30. A 10-day holiday during this important period is a dampener for stock market momentum. Following the US experience, the PSE should seriously consider opening the stock exchange for trading even if there is no clearing and let settlement follow on the next working day. Afternoon trading has shown that longer trading hours work towards the benefit of the market and its participants. More trading days should be no different.

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Champion caregiver singer

In last week’s article, we highlighted that our country has more beauty queens and musicians. Filipinos are known for their strong inclination towards singing and dancing, happy disposition and good service orientation. In response to this, some of our readers asked us what the relation of beauty queens and musicians are to their investments.

It is precisely our extraordinary abilities and cheerfulness that has led to the success of Filipinos abroad across a diverse range of fields. This is the reason that OFWs are welcomed all over the world. As a result, we see how OFW remittances continue to grow, regardless of the weakness in global growth. These remittances fuel domestic consumption, which accounts for 75 percent of GDP. This leads to robust corporate earnings growth which directly translates to stronger stock prices.

These traits were exemplified by Rose Fontanes, a very ordinary caregiver who won the inaugural season of X-Factor in Israel. A plain OFW, she is now being compared to Susan Boyle, the winner of Britain’s Got Talent in 2009. Again, this is a testament to the many talents and versatility of our countrymen. Congratulations, Rose Fontanes!

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