Once-a-month payday in the Philippines, why not?
As an economics student, I wonder why salaries in the Philippines are given out at least bimonthly, as the Labor Code stipulates. My cultural exposure in many competitive countries itches my fingers, itches my mind: “Why can’t the Philippines do the same?” Here’s why it should.
A salary distributed too frequently encourages a high-spending but low-savings mindset. Well-known for our “sachet” economy, Filipino consumers spend a lot immediately but get the smallest bang for the buck. Sadly, this “sachet” mentality is a vicious and inefficient, self-perpetuating cycle—you just have to spend and spend for those highly expensive tingi-tingi and never get to save!
Changing the frequency by which salaries are given will alter our spending habits. Implicitly, we teach our people how to resist the spending itch, how to plan long-term and for the best, and how to open the door to saving schemes that reward high-volume savings and infrequent spending.
There are many other reasons we should make the Philippines a savings country. Now that it is a creditor, the Philippines should save more. But most importantly, the more savings a country has, the more funds entrepreneurs can tap for loans. First, this encourages small and medium enterprises through cheap loans provided by a high-savings country. Second, this reduces the pressure brought by unemployment. Many people seek jobs that companies cannot provide, while we lack new small/medium enterprises that can offer new jobs.
Singapore, Hong Kong and most competitive countries have high savings rate. Often, in these countries salaries are given once a month. Of course, there are other factors that encourage their saving habits. But definitely, a once-a-month payday is one of them.
—KURT TANYU,
