Rejoinder to the Manila Times’ column “Back to Bubble” by Mr. Ben D. Kritz
13 February 2015
MR. BEN D. KRITZ
The Manila Times
2/F Sitio Grande Building
409 A. Soriano Avenue
Dear Mr. Kritz:
We would like to respond to your column on 11 January 2015 in the Manila Times on the is-sue of “excessive number of official holidays” and their effects on business.
We certainly don’t agree that DOLE wage regulations—which you called “needlessly confus-ing”—should be blamed for employers’ extra payroll costs during holidays.
The DOLE infographic that you referred to is intended to provide workers and enterprises a quick reference, a guide, of the pay regulations during holidays and special (non-working) days, including pay for work rendered beyond eight hours. We assure you workers and em-ployers don’t call the DOLE hotline, or proceed to DOLE regional offices, and its attached agencies to say they are confused with pay regulations: they call or visit for help on how to do the math for holiday pay.
The DOLE issues wage regulations in response to the categories of non-working days ob-served in the Philippines. Proclamation No. 831, Series of 2014, declared 10 regular holidays, seven special (non-working) days, one special holiday for schools, and two holidays in ob-servance of Eid’l Adha and Eid’l Fit’r for 2015, a total of 20 holidays—12 regular and eight special holidays. In addition, Proclamation 936 declared January 15, 16 and 19 of this year as special non-working days in the National Capital Region, in view of the visit of Pope Francis.
The Labor Code entitles a worker to 100 percent of his regular wage during regular holidays, if unworked, and 200 percent of the regular wage, if worked. In the case of special non-working holidays, workers are entitled to 130 percent of their regular wage, only if work is rendered on these days. The Cost of Living Allowance (COLA) is included in the computa-tion of (regular) holiday pay.
Workers benefit from the observance of holidays because it gives them respite from the daily routine and demands of work. It allows workers to spend time with the family, and to engage in recreational and cultural activities that contribute to greater work-life balance. These ac-tivities also stimulate consumption which means profits for enterprises and revenues, in the form of taxes, for government.
We agree that higher labor costs affect businesses, especially more seriously the micro, small, and medium enterprises (MSMEs) which comprise 99 percent of the 900,000 establishments nationwide.
MSMEs have relatively limited capacity to absorb additional labor costs and when they are forced to continue operations even during the holidays, the additional costs are almost entire-ly passed on to consumers through higher prices. Higher prices, in turn, may erode MSMEs’ competitiveness, on one hand, and may discourage consumption, on the other hand. Variabil-ity in the number and scheduling of holidays may also affect the capability of firms to coor-dinate a mutually-desired equilibrium of wages and labor hours.
Lastly, the DOLE has repeatedly called for a balanced approach to the crafting of legislative measures on additional non-working holidays as more holidays affect the overall productivity and competitiveness of the Philippine economy, particularly on labor and employment.
The Philippines, next to Cambodia, has the most number of national holidays among ASEAN member-states. The Philippines, however, grants the least number of annual leave benefits (5 days) compared to Cambodia (18 days), Malaysia (8-16 days), Lao (15 days), Brunei (7-14 days), Myanmar (10-14 days), Vietnam (12 days), Indonesia (12 days), Singapore (7 days) and Thailand (6 days).
Thank you for your kind consideration of this rejoinder.
(Sgd.) ROSALINDA DIMAPILIS-BALDOZ