The Economics of Filipino Christmas

It’s the most wonderful time of the year…

Yes, Christmas is the highly anticipated day in the calendar in almost every country on Earth. Yet, there is one place where it’s celebrated with more fun fare than anywhere else — the Philippines.

Why? It is considered the longest Christmas celebration in the world that spans from September 1 to January 15 the next year. Most businesses try to generate a lot of sales during the “Ber” months with a variety of promotions leading up to December and New Year. Although it’s a festive religious celebration in a majority Catholic country, commercialization is in full swing due to the expansion of shopping malls throughout the archipelago.

Shopping malls have to embrace the Christmas spirit earlier than usual in order to drive more people inside and spend. Retail stores start pushing out their Christmas-themed products as these generate far greater interest than any other month.

The number of smartphone users in the country has increased tremendously over the past decade. That means consumption is fuelled by the growing demand for goods and services on e-commerce sites like Shopee and Lazada thereby bringing in more income for small businesses and online sellers.

It is also interesting to point out that the Philippines has a significantly large overseas diaspora population that contributes a huge chunk to the national economy through remittances sent to loved ones back home. The overseas Filipino workers (OFWs) sent nearly $30 billion or about 10% of the total gross domestic product. In fact, the remittances have increased by 4.3% year on year in August 2022.

It is expected that a lot of them will go home for Christmas as overseas travels were put on hold in previous years due to the global pandemic. As the country is transitioning to the new normal, businesses have started to pick up the pieces and take advantage of the growing tourist arrivals.

Why Start Early?

It doesn’t matter if you’re a small business or an established corporation, there is a big benefit to starting Christmas earlier than usual.

According to this 2021 survey, 27% of holiday shoppers intend to start gift buying by the end of September. Although most deals are usually offered during Black Friday and Cyber Monday, the pandemic has pushed a lot of shoppers online. In the Philippines, consumers have started their Christmas gift hunting to avoid delivery delays. Even with a lot of e-commerce promotions, a lot of retailers have to slash prices earlier.

An interesting study conducted by WorldRemit on 14 countries to determine the true cost of Christmas showed that Filipinos spend 257% of their monthly income on the holiday. It is noteworthy that there are over 244 million people considered immigrants around the world, including 12 million overseas Filipinos in the United States, Canada, Japan, Kuwait, Singapore, Hong Kong, Saudi Arabia, and Italy.

Filipinos spend 45% of the entire cost of celebrating Christmas on noche buena, 48% on gifts, and 7% on holiday decorations. As compared to 10 of the 14 countries, more than 50% of the monthly household income is spent during Christmas.

Channel the Yuletide Atmosphere

By the time September begins, businesses start unveiling their garlands, wreaths, and colorful lights to go along with the obligatory Jose Mari Chan classics and Mariah Carey’s signature song to drive people in. These things create a subliminal effect on people so that they end up checking on good deals and promos around them. Even the smell of puto bumbong and roasted chestnuts affect every shopper’s mood to stimulate spending.

Retailers tend to make anywhere from 20% to 40% of their entire yearly income in December alone so starting it earlier would definitely increase sales significantly.

Boost Productivity

Some businesses tend to have a skeletal crew working on the holiday as Filipinos tend to spend at least two weeks of holiday vacation. Bringing in the holiday feel in the workplace brings some benefits as long as vacation days are managed effectively.

With that being said, happy employees tend to provide better customer service thereby boosting productivity in the workplace. It compensates for the decline in efficiency in the latter half of December and the early half of January of the next year. Studies have shown that holiday decorations put employees in a better mood thereby channeling the holiday cheer to the customers. When customers are happy, they are more likely to buy and recommend the business to their friends.

It gives much-needed time for the business to make adjustments and new changes while giving employees time to rest and recuperate for the next year.

“Christmas Creep”

It is a retailing phenomenon where Christmas retail is starting earlier than the previous years. Although Filipinos are already used to early holiday decors and Christmas trees showing up in malls, there are rare occasions when you end up hearing a familiar carol tune as early as June or July. More countries, like the United States and Canada, have seen this creeping in.

In fact, a few American stores even brought out their first Christmas displays right after Labor Day-the first Monday in September! Will Rudolph the Red-Nosed Reindeer soon be competing with the Easter Bunny for consumers’ cash?

Make Up for Lost Profits

It is often said that the holidays are the only time for businesses to make a last dash to make up for lost profits for the most part of the year. That’s why there is Black Friday and Cyber Monday. The holidays are critical to the retail economy, especially for businesses that are running in the red. It makes perfect business sense to maximize retailing activities during that period.

As Christmas is much longer in the Philippines, businesses have a longer holiday selling season so it gives them more opportunity to generate more sales. Credit cards and pay-for-later schemes have also gained popularity in recent years. Businesses that normally get a ‘sales boost’ in December can plan ahead and gain more in an extended holiday selling season.

Temp Jobs Galore

There is a big boost to employment in both the formal and informal economy during this time of the year. The Christmas shopping rush puts tremendous pressure on retailers to recruit temporary and seasonal workers. However, there is also a sudden drop in employment once the holiday ends.

Unwanted Environmental Impact

This period also coincides with the sudden increase in manufacturing as more goods are produced while also maintaining greater demand for fuel and electricity to keep every light on and houses warmed up. With more people buying gifts, there will be unwanted ones. As these gifts create employment through their production, carbon emissions increase while more waste is produced. It is estimated that 30% of all rubbish is produced during this period and carbon footprint is a significant fraction of the annual carbon dioxide emissions.

Economic Stimulus

Let’s face it, the past two years have been really, really tough on all of us. Seeing the adjustments and changes being made this year suggests that the holiday season will be a great economic stimulus that would help businesses recover and people to start enjoying life once again.

Of course, we understand that we’re still living in a seasonal cycle of boom and bust whenever the holiday season comes around. Perhaps this will be the miracle we have been waiting for before the year ends.

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Historian, blogger, genealogist, copywriter & video game geek. Check out my bio at bio.link/jpcanonigo.

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J.P. Canonigo

Historian, blogger, genealogist, copywriter & video game geek. Check out my bio at bio.link/jpcanonigo.