For most countries, the holiday season begins in November — when temperatures drop, snow starts to fall, and the calendar year winds down.
In the Philippines, however, Michael Bublé, Mariah Carey and Jose Mari Chan make their annual appearances, warbling in video clips online as early as September, with wreaths and parols adorning public spaces and Halloween often skipped altogether.
Significant boost
With the Philippine economy heavily dependent on consumption — accounting for roughly 73 percent of gross domestic product (GDP) as of 2024 — the holiday season traditionally provides a significant economic boost.
Data from Visa show that Filipinos begin shopping early, with spending steadily increasing throughout December. Weekend spending spikes are pronounced, culminating in a peak on 23 December.
During this period of heightened consumption, businesses and consumers rely on one another in a cyclical, almost symbiotic relationship. Spending is fueled by increased remittances from overseas Filipino workers (OFWs), aggressive retail and online sales, and the release of 13th month pay and Christmas bonuses.
Mandatory 13th month pay
The Philippines is among the few countries with a mandatory 13th month pay, legally set at no less than one-twelfth of an employee’s total basic salary earned within a calendar year. While employers are required to release the benefit by 24 December, many companies distribute it as early as October or November.
For many households, the 13th month pay represents 8 to 10 percent of annual income, arriving squarely during peak sales months. This encourages retailers to stretch Christmas campaigns over several months rather than weeks. When combined with discretionary bonuses, fourth-quarter consumption rises without corresponding increases in base wages — effectively acting as a seasonal economic stimulus.
OFW remittances peak in December
Remittances from OFWs also typically peak during the holiday season, particularly in December.
“It is important to note that OFW remittances and conversion to pesos seasonally increase/accelerate, if not peak, in Q4 especially during the Christmas holiday season towards the end of the year, especially within a week before Christmas to finance the surge, if not the peak, in holiday-related spending, a consistent pattern seen for many years/decades,” said RCBC economist Michael Ricafort.
Data from the Bangko Sentral ng Pilipinas (BSP) show that December remittances usually account for 9 to 10 percent of total annual inflows, above the monthly average of 8.3 percent.
In December 2024, personal remittances reached approximately $3.7 billion, among the highest monthly totals on record. Fourth-quarter remittances (October to December) regularly exceed $10 billion, injecting liquidity just as retailers ramp up promotions.
Mega-sales as early as September
This surge in liquidity translates into increased spending — a trigger many Filipinos are eager to pull. To capitalize on the season, businesses roll out extensive sales and promotions. Online platforms such as Lazada and Shopee now launch mega-sales as early as September, from 9.9 through 12.12 in December, with many retailers also adopting the American Black Friday sales trend.
E-commerce platforms report double- to triple-digit growth in gross merchandise value on major sale days compared with regular days. As a result, sellers now prepare Christmas inventory as early as August, spreading marketing expenditures over four months. While revenues rise, costs also increase — compressing margins for some merchants.
Four-month expense cycle
Christmas, once a single sales spike, has evolved into a four-month expense cycle.
While the holiday season is associated with joy, generosity and togetherness, it also creates opportunities for bad actors. Fraudsters may exploit the buying frenzy by posing as legitimate sellers or offering credit under deceptively favorable terms.
The Philippines is counting on a strong fourth quarter to help offset the economic slowdown caused by the flood control scandal.
BSP Governor Eli M. Remolona Jr. has previously said the central bank expects fourth-quarter GDP growth to slow to 3.8 percent, down from 4.0 percent in the previous quarter — a period that rattled markets and sent the peso to a then-record low.
With the holiday season in full swing, the country is once again spending its way forward, hoping Christmas consumption can help pull the economy out of the “Floodgate”-induced downturn.
