Sure, You Can Use TO_DATE

DECLARE 
   l_holiday DATE := TO_DATE ('2016-01-01', 'YYYY-MM-DD'); 
BEGIN 
   DBMS_OUTPUT.PUT_LINE (TO_CHAR (l_holiday, 'FMMonth DD, YYYY')); 
END;

But You Can Simplify Matters

DECLARE 
   l_holiday DATE := DATE '2016-01-01'; 
BEGIN 
   DBMS_OUTPUT.PUT_LINE (TO_CHAR (l_holiday, 'FMMonth DD, YYYY')); 
END;

Only One Format Supported

DECLARE 
   /* Invalid format, fails with: 
      PLS-00166: bad format for date, time, timestamp or interval literal 
   */ 
   l_holiday DATE := DATE '01-JAN-2016'; 
BEGIN 
   DBMS_OUTPUT.PUT_LINE (l_holiday); 
END;