NextGen Day

According to a House leader on Wednesday, President Ferdinand Marcos Jr.’s brand of “vacation economics” will increase domestic travel and other associated industries without adversely impacting labor costs or worker productivity in the Philippines.

According to Joey Salceda, chair of the House Ways and Means Committee, a 10% increase in domestic tourism as a result of longer vacation weekends will help numerous other industries. This claim is supported by a Philippine Statistics Authority analysis of input-output tables.

4.9 percent in personal consumption, 3.5 percent in final demand and total consumption, 8.8 percent in gross value added (GVA) for trade, 5.5 percent in GVA for food manufacturing, 5.4 percent in GVA for transport, 4.4 percent in GVA for recreational activities, and 5.9 percent in GVA for hospitality, according to him, will be the next increases.

“There will be 10 long weekends this year due to PBBM’s policy. This will dramatically increase domestic travel, especially among those seeking “revenge travel” or regaining experiences lost during the COVID-19 lockdowns, according to Salceda.

The regular holidays and exceptional non-working days for 2023 were announced in Proclamation 42, which was amended by Proclamation 90, which was issued on November 11, 2022.

In order to provide for their families fundamental food and non-food needs, employees “need more jobs and more sources of income at this time,” according to the declaration.

In the decree, Marcos stated that “there is a need to adapt these holidays pursuant to the theory of holiday economics,” which holds that “a long weekend will assist boost domestic travel and raise tourism spending in the country.”

However, he issued a warning that holiday economics should strike a balance between creating longer weekends and reducing the overall number of holidays.

“PBBM maintained the existing level of 18 for both regular and exceptional non-working holidays. This increases the benefits of long weekends for tourism while keeping labor costs for businesses stable, according to Salceda.

He pointed out that an increase in the number of holidays by one day costs the economy’s various sectors at least PHP25,2 billion in lost wages and additional wages if they force workers to work.

This is “particularly difficult,” according to the legislator from Albay, for the business process outsourcing (BPO) industry, where wage prices can reach 46.53 percent of total labor costs without accounting for tourism growth.

He claimed that when there are too many vacations, low-margin sectors like manufacturing likewise become unprofitable operations.

The program “should be highly beneficial as long as PBBM restricts the number of holidays and focuses holiday economics on only maintaining holidays close to each other,” he said.

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