THE Philippines has the unofficial title of being the country with the longest Christmas season. This year, we may have gained another: the nation with the fewest business days during the Christmas and New Year period.
From December 20, 2014 to January 4, 2015, we will have had a total of 13 “days off” out of 16 calendar days. We always have many nonbusiness days at the end of every year, but this year is a little unusual. In 2015 we will have 11 days off, unless the government declares more special nonworking days.
Part of the reason for this is Rizal Day being commemorated so close to the New Year. Also, with Christmas Day falling on a Thursday this year, it was only natural for many people to have Friday off, too, and make it a very long weekend.
While it is pleasant, from a personal viewpoint, to have so many days to relax and indulge in family activities, these may cost the nation economically.
Within these two weeks, the Philippine banking system would only be open for three days. It is almost impossible to accurately quantify the monetary loss from the holidays. However, Hans Sicat, president and CEO of the Philippine Stock Exchange (PSE), was quoted as saying, “We understand that prolonged breaks can be disruptive to the financial system, especially in the context of globalizing environments, and we have, thus, asked the Bangko Sentral ng Pilipinas [BSP] to take into account, in subsequent similar occasions, opening clearing operations to minimize such disruptions.”
The loss of business to the local stock market is substantial. On the other hand, department-store executives are probably saying, “Great! More days for shopping!”
There may be a hidden advantage to the PSE being closed more often during this period, as the American stock markets often act strangely toward the end of the year. This is because investors must prepare for 2015 tax consequences by selling losing positions to offset capital gains on the winners. Stocks trading near their yearly lows are sold down and then may be bought back after the new year begins.
We can appreciate Sicat’s concern, though, as the PSE saw stronger-than-expected trading volume on Monday and Tuesday than what might be normal for this time of year. His suggestion to the BSP should be given attention, as the banks and stock market do not need to be closed for every holiday.
Consider: The New York Stock Exchange was closed for nine days in 2014; the PSE, for 16.
Image credits: Jimbo Albano