Holiday Economics in the Philippines

We celebrate holidays to commemorate an event or a person of special significance to the country. While the declaration of holidays is supposed to bring unity, it sometimes results to confusion in the workplace, even if unintended.

Rationalizing national holidays

Republic Act No. (“R.A.”) 9492 was passed in 2007, reflecting the practice of moving certain holidays to Monday. The practice, dubbed as “holiday economics”, was meant to benefit the economy, as people are expected to travel and spend more in vacations during the long weekends.

R.A. 9492 was enacted to “rationalize” the celebration of national holidays in the Philippines. The new law makes the holidays “movable” to Mondays, except Christmas Day and New Year’s Day. In the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week. If the holiday falls on a Sunday, the holiday will be observed on the Monday that follows.

Still, for movable holidays, the President is required to issue a Proclamation, at least six months prior to the holiday concerned, that the specific date that shall be declared as a nonworking day. We could surmise that the requirement of a Proclamation, at least six months prior to the holiday concerned, is partly intended for employers to prepare for the added cost in case they require work on those holidays (or prepare for contingencies in case they won’t require work for that date). The 6-month period was not strictly complied in the previous years, which resulted to second-guessing on everyone’s part.

Adding to the confusion is the apparent deviation from the letter of R.A. 9492, which provides that holidays must be moved to the nearest Monday. Many holidays are fixed on a Friday. Some holidays, like Labor Day on May 1, are maintained even if not falling on a Monday (or even a Friday).

Malacanang also declares certain days, other than the ones enumerated in R.A. 9492, as special holidays. The more recent Proclamations declared August 5 (for the burial of former President Cory Aquino) and September 7 (for the burial of Minister Erano Manalo) as special non-working holidays.

The HR department must not only keep track of the dates of holidays, it must also check as to the coverage of the Proclamation. For instance, the initial news that the employees received about the September 7 non-working holiday does not include the proviso that the BPO sector is excluded from its coverage.

Remaining holidays for 2009

The remaining holidays for 2009, as fixed under Proclamation 1699, are: All Saints Day (November 1); Additional special non-working day (November 2); Bonifacio Day (November 30); Additional special non-working day (December 24); Christmas Day (December 25); Rizal Day (December 30); and Last Day of the Year (December 31).

(Note: Maybe you’re looking for November 27-28, previously declared as a national holiday under Proclamation 1808. RA 9492 provides that Eid’l Adha is a regional holiday. We’ve previously noted that Malacanang issued Proclamation 1808-A, amending Proclamation 1808 and declaring that Ed’l Adha is a regional holiday in the Autonomous Region in Muslim Mindanao [ARMM].)

Declared Holidays for 2010

For the 2010 holidays, Malacanang already issued Proclamation No. 1841, fixing the following dates:

  • New Year’s Day (January 1)
  • EDSA People Power, all schools only (February 22)
  • Maundy Thursday (April 1)
  • Good Friday (April 2)
  • Araw ng Kagitingan (April 9)
  • Labor Day (May 1) (Note: Moved to May 3, per Proclamation 2043)
  • Independence Day (June 14)
  • Ninoy Aquino Day (August 23)
  • National Heroes Day (August 30)
  • Eid’l Fitr (Movable date)
  • All Saints Day (November 1)
  • Non-working day (November 24)
  • Bonifacio Day (November 29)
  • Christmas Day (December 25)
  • Rizal Day (December 27)
  • Last Day of the Year (December 31)

Types of Holidays and Holiday Pay

Holiday pay is intended to prevent the diminution of the monthly income of the employees on account of work interruptions by reason of declared holidays. The Department of Labor and Employment (DOLE) has issued a circular on the computation of holiday pay.

  • Regular holidays. (1) If unworked, whether the holiday falls on a regular workday or a restday, the employee receives 100% of his salary; (2) If worked and it falls on a regular workday, 200% for the initial 8 hours; and (3) If worked and it falls on a restday, 200% during the initial 8 hours.
  • Special Non-Working Holidays. (1) If unworked, there is no pay; (2) If worked and it does not fall on a restday, plus 30% of the daily rate of 100% for the initial 8 hours; and (3) If worked and it falls on a rest day, plus 50% of the daily rate of 100% for the initial 8 hours.
  • Special working holidays. The “no-work, no pay” rule applies and the employee is entitled only to his basic rate if he works.

We are often asked if an employee should receive additional pay on a regular holiday, even if unworked, because the pay slip does not reflect any holiday pay. We usually reply with a question – is the employee monthly-paid or daily-paid? A monthly-paid employee is one who is paid his wage or salary for every day of the month, including rest days, Sundays, regular or special days, although he does not regularly work on these days. A daily-paid employee, on the other hand, is one who is paid his wage or salary only on the days he actually worked, except in cases of regular holidays wherein he is paid his wage or salary even if he does not work during those days, provided that he is present or on leave of absence with pay on the working day immediately preceding the regular holiday. There are nuances, of course, but let’s leave that for future discussions.

One additional paid regular holiday

We used to have ten (10) regular holidays. This is the reason for the 251 divisor, used by some companies in computing the daily wage, which represents the 365 days of the year, less 52 Saturdays, 52 Sundays and the 10 legal holidays. The new law added one more regular holiday – the Eid’l Fitr. We thus have eleven (11) regular holidays under R.A. 9492:

  1. New Year’s Day (January 1)
  2. Maundy Thursday (Movable date)
  3. Good Friday (Movable date)
  4. Eid’l Fitr (Movable date)
  5. Araw ng Kagitingan – Bataaan and Corregidor Day (Monday nearest April 9)
  6. Labor Day (Monday nearest May 1)
  7. Independence Day (Monday nearest June 12)
  8. National Heroes Day (Last Monday of August)
  9. Bonifacio Day (Monday nearest November 30)
  10. Christmas Day (December 25)
  11. Rizal Day (Monday nearest December 30)

The Labor Code provides that every worker shall be paid his daily wage during regular holidays. Employers are now required to pay for an extra regular holiday.

Holiday Economics

Many believe that these proclamations, declaring additional non-working holidays, would benefit the workers who would have more free time to rest or spend with his/her family. Employees and workers who are required to work will receive additional benefits.

On the other hand, employers who can’t afford, or would not want, to pay the additional burden won’t allow work on that day, resulting to less income for those who are covered by the “no-work, no-pay” rule. Those outside the Philippines who have confirmed schedules for important business trips to the Philippines may have to cancel at the last minute. For employers who have no choice but to do business on the declared non-working holiday, the added expense is a heavy load on top of the current economic crisis.

In the end, regardless of one’s opinion on the existing rules on holiday pay, this is a legal requirement that must be complied with. As the legal maxim goes – the law may be harsh, but it is the law.

One thought on “Holiday Economics in the Philippines

  1. faye_24

    Hello Attorney,
    I am a monthly paid and regular employee, Our company just release this policy that the employee is not entitled for a holiday pay if he/she didnt show-up before the day of the regular or legal holiday. The situation is like this, I wasnt able to work before the day of the Legal holiday because I am sick. The President declared Labor day to move this Monday which is May 3, so this means that the legal holiday falls on May 3 (Monday)and Saturday is our regular working day (May 1), this day is our critical working days so either the employee is sick or not, is required to work or if will provide a medical certificate and this day I wasnt able to show-up at work and had called the office. Is there any rule in labor code that if the employee dont work before the day of legal holiday or any holidays is not entitled to get paid? Please give your insights to this I am really confused. Thank you and more powers!


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