- Construction of buildings leads the sector in terms of number of establishments
Based on the preliminary results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI) conducted nationwide in 2015, there were 1,103 construction establishments with total employment (TE) of 20 and over in the formal sector of the economy. Majority of these establishments were engaged in construction of buildings with 412 or 37.4 percent of the total. Construction of roads and railways followed with 286 establishments (25.9%), and electrical, plumbing and other construction installation activities with 221 establishments (20.0%). On the other hand, demolition and site preparation recorded the least number with only 3 establishments (0.3%).
Figure 1 shows the distribution of construction establishments with TE of 20 and over by industry group in 2014.
National Capital Region (NCR) with 588 establishments or 53.3 percent of the total, led the regions in terms of the number of establishments. CALABARZON ranked a far second with 121 or 11.0 percent of the total. MIMAMOPA recorded the least count with only 6 establishments (0.5%) each. Meanwhile, no construction establishment was recorded in ARMM in 2013.
Figure 2 shows the regional distribution of construction establishments with TE of 20 and over in 2014.
- Construction of buildings generates the highest employment
Construction establishments with TE of 20 and over employed a total of 259,702 workers in 2014. Of the total employment, 99.9 percent are paid employees and the rest are working owners and unpaid workers.
Construction of buildings with 103,256 workers (39.8%) reported the highest number of workers. This was followed by construction of roads and railways with 87,148 workers (33.6%). Electrical, plumbing and other construction installation activities with 35,651 workers (13.7%) placed third.
Figure 3 shows the distribution of employment for construction establishments with TE of 20 and over by industry group in 2014.
NCR, having the most number of establishments, employed the bulk of the workers numbering to 185,365 or 71.4 percent of the total. CALABARZON with 19,522 (7.5%) workers followed distantly. Completing the top three regions with the most number of workers was Central Visayas with 17,028 workers (6.6%).
The average number of workers per establishment was recorded at 235 for the sector. Building completion and finishing reported the highest with 310 workers per establishment, followed by construction of roads and railways, and construction of buildings with 305 and 251 workers per establishment, respectively.
- Demolition and site preparation pays the highest average annual compensation
Total compensation paid in 2014 amounted to PHP63.3 billion, indicating an average annual compensation of PHP243,860 per employee.
Demolition and site preparation paid the highest average annual compensation amounting to PHP371,869 per employee. This was followed by construction of roads and railways with employees receiving an average annual pay of PHP317,633. Construction of utility projects placed third at PHP247,020 per employee.
Figure 4 displays the average annual compensation of employees for construction establishments with TE of 20 and over by industry group in 2014.
At the regional level, six regions reported an average annual compensation higher than the national average. These are:
- Bicol Region with PHP406,071
- Cagayan Valley with PHP391,551
- MIMAROPA with PHP284,849
- Zamboanga Peninsula with PHP275,263
- NCR with PHP272,319
- Ilocos Region with PHP246,137
- Value of output reaches PHP328.9 billion
Total value of output generated by construction establishments with TE of 20 and over amounted to PHP328.9 billion in 2014.
By industry, value of output generated by construction of buildings accounted for more than two fifths (46.5% or PHP153.0 billion) of the total.This was followed by construction of roads and railways with an output share of 32.4 percent (PHP106.6 billion). The shares of other industries to the total value of output are as follows:
- Electrical, plumbing and other construction installation activities,10.9 percent (PHP35.9 billion)
- Construction of other civil engineering projects, 3.6 percent (PHP11.8 billion)
- Construction of utility projects, 2.5 percent (PHP8.3 billion)
- All other construction industries, 4.1 percent (PHP13.3 billion)
Figure 5 shows the distribution of value of output for construction establishments with TE of 20 and over by industry group in 2014.
Among regions, NCR shared the biggest output value amounting to PHP245.0 billion, comprising 74.5 percent of the total value of output. This was followed by CALABARZON and Central Visayas with respective output value and shares of PHP17.5 billion, 5.3 percent and PHP16.3 billion, 5.0 percent.
- Total expense amounts to PHP303.3 billion, construction of buildings spends the most
Total expense, including compensation, amounted to PHP303.3 billion in 2014.
Among industries, construction of buildings incurred the highest expense amounting to PHP141.6 billion or 46.7 percent of the total. Construction of roads and railways placed second with PHP98.5billion (32.5%). Electrical, plumbing and other construction installation activities came in next with a total expense of PHP31.7 billion (10.4%).
NCR spent the highest expense among the regions estimated at PHP228.7 billion (75.4%).This was followed by CALABARZON and Central Visayas spending PHP15.7 billion (5.2%) and PHP15.0 billion (5.0%), respectively.
- Construction of buildings records the highest return
Income per expense ratio for establishments with TE of 20 and over in 2014 was recorded at 1.11, indicating that for every peso spent PHP1.11 was realized in terms of income.
Among industries, construction of other civil engineering projects registered the highest income per expense ratio of 1.19, followed by electrical, plumbing and other construction installation activities with 1.16 income per expense ratio. Other industries with more than 1.00 income per expense ratio are as follows:
- Construction of roads and railways, 1.11
- Construction of buildings, 1.10
- Construction of utility projects, 1.07
- Other specialized construction activities and demolition and site preparation, 1.04
- Demolition and site preparation, 1.04
- Building completion and finishing, 1.01
Among regions, Caraga recorded the highest return at 2.18 income per expense ratio. Central Luzon followed next at 1.29 and CAR at 1.14 income per peso expense.
- Value added reaches PHP123.0 billion
Value added generated by the establishments with TE of 20 and over reached PHP123.0 billion in 2014.
The top three industries in terms of value added, accounted for 90.4 percent of the total. Construction of buildings recorded as the top contributors to value added with PHP49.3 billion or 40.0 percent of the total. This was followed by construction of roads and railways with PHP47.7 billion (38.8%) and electrical, plumbing and other construction installation activities came next with PHP14.2 billion (11.5%).
By region, NCR contributed the biggest share with PHP92.3 billion or 75.1 percent of the total value added, followed by CALABARZON and Central Visayas with respective value added and shares of PHP7.0 billion, 5.7 percent with PHP 6.2 billion, 5.1 percent.
- Labor productivity is PHP473.8 thousand per worker
Labor productivity was estimated at PHP473.8 thousand per worker in 2014.
Demolition and site preparation generated a labor productivity of PHP637.9 thousand per worker, among industries. Construction of other civil engineering projects followed with PHP635.5 thousand per worker. Labor productivity of other construction industries are as follows:
- Construction of roads and railways (PHP547.5 thousand per worker)
- Construction of buildings (PHP477.1 thousand per worker)
- Construction of utility projects (PHP457.7 thousand per worker)
- Electrical, plumbing and other construction installation activities (PHP398.3 thousand per worker)
- Other specialized construction activities (PHP279.6 thousand per worker)
- Building completion and finishing (PHP172.0 thousand per worker)
Figure 6 shows the labor productivity for construction establishments with TE of 20 and over by industry group in 2014.
Among regions, the most productive was Caraga generating PHP855.0 thousand value added per worker. Cagayan Valley followed with PHP734.4 thousand value added per worker and Central Luzon placed third with PHP654.7 thousand value added per worker.
- Construction of buildings posts the highest gross addition to tangible fixed assets
Gross addition to tangible fixed assets, defined as capital expenditures less sale of fixed assets, amounted to PHP7.3 billion in 2014.
Construction of buildings acquired PHP3.4 billion worth of gross addition to fixed assets or 46.4 percent of the total. Other construction industries gross addition to fixed assets are as follows:
- Construction of roads and railways with PHP3.3 billion (44.4%)
- Electrical, plumbing and other construction installation activities with PHP273.4 million (3.7%)
- Other specialized construction activities with PHP199.2 million (2.7%)
- Construction of other civil engineering projects with PHP83.5 million (1.1%)
- All other construction industries with PHP115.3 million (1.6%)
- Total subsidies received amounts to PHP1.5 billion
Total subsidies provided by the government to support the business operation of construction establishments with TE of 20 and over amounted to PHP1.5 billion.
Establishments engaged in construction of roads and railways received PHP1.5 billion while construction of buildings received PHP5.0 million. Only two regions received subsidies in 2014. Of this, Western Visayas received PHP1.5 billion or 99.7 percent while NCR received PHP5.0 million or 0.3 percent worth of subsidies in 2014.
This Special Release presents the preliminary results of the 2014 ASPBI for the Construction sector for establishments with total employment of 20 and over.
The 2014 ASPBI is one of the designated statistical activities of the Philippine Statistics Authority (PSA). Data collected from the survey provide information on the levels, structure, performance, and trends of economic activities of the formal sector in the entire country for the year 2014. The 2014 Survey of Tourism Establishments in the Philippines was undertaken as a rider to this survey.
The survey was conducted nationwide in April 2015 with the year 2014 as the reference period of data, except for employment which is as of November 15, 2014.
Like the 2013 ASPBI operations, the data processing for this survey was decentralized to the Provincial Statistics Services Offices (PSSOs) as the provinces are near the establishments which are the data source of the survey.
Data are presented at the national and industry group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC) and at the regional level.
- Legal Authority
The conduct of the 2014 ASPBI is authorized under the following:
Republic Act 10625 known as the Philippine Statistical Act of 2013 – (Reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities). It shall be the policies of the State to effect the necessary and proper changes in the organizational and functional structures of the PSS in order to rationalize and promote efficiency and effectiveness in the delivery of statistical services.
Section 27 of Republic Act No. 10625 states that:
“… Respondents of primary data collection activities such as censuses and sample surveys are obliged to give truthful and complete answers to statistical inquiries. The gathering, consolidation and analysis of such data shall likewise be done in the most truthful and credible manner. Any violation of this Act shall result in the imposition of the penalty of one (1) year imprisonment and a fine of One hundred thousand pesos (P100,000.00). In cases where the respondent fails to give truthful and complete answers to such statistical inquiries is a corporation, the above penalty shall be imposed against the responsible officer, director, manager and/or agent of said corporation. In addition, such erring corporation, enterprise or business concerned, shall be imposed a fine ranging from One hundred pesos (P100,000.00) to Five hundred thousand pesos (P500,000.00)…”
- Scope and Coverage
The 2014 ASPBI covered establishments engaged in 18 economic sectors classified under the 2009 PSIC, namely:
- Agriculture, Forestry and Fishing (A)
- Mining and Quarrying (B)
- Manufacturing (C)
- Electricity, Gas, Steam, and Air Conditioning Supply (D)
- Water Supply; Sewerage, Waste Management and Remediation Activities (E)
- Construction (F)
- Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (G)
- Transportation and Storage (H)
- Accommodation and Food Service Activities (I)
- Information and Communication (J)
- Financial and Insurance Activities (K)
- Real Estate Activities (L)
- Professional, Scientific and Technical Activities (M)
- Administrative and Support Service Activities (N)
- Education (P)
- Human Health and Social Activities (Q)
- Arts, Entertainment and Recreation (R)
- Other Service Activities (S)
However, three (3) sectors of the 2009 PSIC are not covered. These are:
- Public Administration and Defense; Compulsory Social Security (Section O)
- Activities of Households as Employers; Undifferentiated Goods and Services Producing Activities of Households for Own Use (Section T)
- Activities of Extra-territorial Organization and Bodies (Section U)
The survey was confined to the formal sector of the economy, which consists of the following:
- Corporations and partnership
- Cooperatives and foundations
- Single proprietorship with employment of 10 and over
- Single proprietorships with branches
Hence, the 2014 ASPBI covered only the following economic units:
- All establishments with total employment of 10 and over; and
- All establishments with total employment of less than 10, except those with Legal Organization = 1 (Single proprietorship) and Economic Organization = 1 (Single establishments), that are engaged in economic activities described according to the 2009 Philippine Standard Industrial Classification (PSIC)
The frame for the 2014 ASPBI was extracted from the 2014 List of Establishments (LE). The estimated number of establishments in operation in the country in 2014 was 944,500. About 266,257 establishments (28.0% of the total establishments) belong to the formal sector of which 231,241 (87.0%) comprised the establishment frame. This frame was used to draw the sample establishments for the survey.
- Unit of Enumeration
The unit of enumeration for the 2014 ASPBI is the establishment. An establishment is defined as an economic unit under a single ownership or control which engages in one or predominantly one kind of activity at a single fixed location.
For the construction sector, the establishment is defined in operational terms to take into account the organization and record-keeping practices by making the single physical location and activity criteria more flexible, hence, the kind-of-activity unit (KAU)was used.KAU is ‘the unit that is engaged in the production of the most homogeneous group of goods and services, usually at one location, but sometimes over a wider area, for which separate records are available that can provide data concerning the production of these goods and services and the materials, labor and physical resources used in this production.”
- Classification of Establishments
An establishment is categorized by its economic organization, legal organization, industrial classification, employment size, and geographic location.
Economic Organization relates to the organizational structure or role of the establishment in the organization. An establishment may be single establishment, branch, establishment and main office with branches elsewhere, main office only, and ancillary unit other than main office.
Legal Organization refers to the legal form of the economic entity that owns the establishment. This provides the legal basis for ownership. An establishment may be single proprietorship, partnership, government corporation, stock corporation, non-stock corporation, and cooperative.
Industrial classification of an economic unit was determined by the activity from which it derives its major income or revenue. The 2009 PSIC was utilized to classify economic units according to their economic activities.
Size of an establishment is determined by its total employment (TE) as of a specific date.
Geographic Classification refers to the classification of establishments by geographic area using the Philippine Standard Geographic Code (PSGC) classification.
The survey utilized stratified systematic sampling with 5-digit PSIC serving as the industry strata and employment size as the second stratification variable.
For establishments with TE of 20 and over, the 17 administrative regions serve as the geographic domains while the 5-digit level (sub-class) of the 2009 PSIC serves as the industry domain.
a. Non-Certainty Stratum (strata TE of 20-49 and TE of 50-99)
The estimate of the total of a characteristic for the non-certainty employment strata in TE of 20 and over for an industry domain in each region (geographic domain) is
s denotes the non-certainty employment strata in TE of 20 and over
p = 1, 2,..., 17 regions (geographic domains)
xspj = value of the jth establishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
j = 1, 2, 3,…, nsp establishments
Wspj = weight of the jth establishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
Nsp = total number of establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
nsp = number of sample establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
b. Certainty Stratum
The estimate of the total of a characteristic for the certainty employment stratum in TE of 20 and over in an industry domain in each geographic domain (region) is
c denotes the certainty employment stratum in TE of 20 and over
p = 1, 2,..., 17 regions (geographic domains)
xcpj = value of the jth establishment in the certainty employment stratum in TE of 20 and over in an industry domain within each region
J = 1, 2, 3, …, mcp establishments
mcp = number of establishments in the certainty employment stratum in TE of 20 and over in an industry domain within each region
c. Total Estimate for TE of 20 and Over
The estimate of the total of a characteristic for the industry domain in each region (geographic domain) was obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,
dp denotes the industry domains in each region
National level estimates of the characteristics by industry domain were obtained by aggregating separately the estimates for the particular industry domain from all the regions.
Weight Adjustment Factor for Non-Response
To account for non-response in the non-certainty strata, the adjustment factors, and (n/n’) was multiplied with the sampling weight (W) of each of the sampling unit. The sampling weight which is defined as N/n was recomputed as
For the non-certainty employment stratum in TE of 20-49 or 50-99, the adjusted weight (W’spj) is
- Response Rate
Response rate for Construction Sector for establishments with TE of 20 and over was 97.1 percent (729 out of 751 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments..
RReports of the remaining non-reporting establishments were imputed based on established imputation methods and from other available administrative data sources. However, reports of establishments which were found to be duplicates and out of business in 2013, were not imputed..
- Limitation of Data
Only the formal sector was covered in the survey.
- Concepts and Definitions of Terms
Economic Activity is the establishment’s source of income. If the establishment is engaged in several activities, its main economic activity is that which earns the biggest income or revenue.
Total employment is the number of persons who worked in for the establishment as of November 15, 2014.
Paid employees are all full-time and part-time employees working in or for the establishment and receiving pay, as well as those working away from the establishment and paid by and under the control of the establishment. Included also are all employees on sick or maternity leave, paid vacation or holiday and on strike. Excluded are directors paid solely for their attendance at meetings, consultants, workers on indefinite leave, working owners who do not receive regular pay, home workers and 98 workers receiving pure commissions only.
Compensation is the sum of salaries and wages, separation, terminal pay and gratuities paid by the establishment to its employees and total employer’s contribution to SSS/GSIS, ECC, PhilHealth, PAG-IBIG etc.
Salaries and wages are payments in cash or in kind to all employees, prior to deductions for employee’s contributions to SSS/GSIS, withholding tax, etc. Included are total basic pay, overtime pay and other benefits.
Income or Revenue includes cash received and receivables for goods/products and by-products sold and services rendered. Valuation is at producer prices (ex-establishment) net of discounts, and allowances, including duties and taxes but excluding subsidies.
E-Commerce refers to the selling of products or services over electronic systems such as the Internet Protocol-based networks and other computer networks, Electronic Data Interchange (EDI) network, or other on-line system. Excluded are orders received from telephone, facsimile and e-mails.
Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchaser prices including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.
Expense refers to cost incurred by the establishment in an enterprise’s effort to generate revenue, representing the cost of doing business. This is treated on a consumed basis. It excludes cost incurred in the acquisition of income generating assets.
Intermediate expense are expenditures incurred in the production of goods such as materials and supplies used, fuels, lubricants, oils and greases used; electricity and water purchased, agricultural/forestry/fishery and industrial services done by others.
Value added is gross output less intermediate input. Gross output is value of output plus income from non-industrial services done for others (except rent income from land). Intermediate input is intermediate expense plus expense for non-industrial services done by others (except rent expense for land) and all other expense.
Value of output represents the sum of the sale of products and by-products, income from industrial services done for others, sale of goods less cost of goods sold, fixed assets produced on own account, and change in inventories of finished products and work-in-progress.
Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.
Change in Inventories is computed as the value of ending inventory less the beginning inventory.
Inventories refer to the stock of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation is at current replacement cost in purchaser prices. Replacement cost is the cost of an item in terms of its present price rather than its original cost.
Subsidies refer to special grants received from the government in the form of financial assistance or tax exemption or tax privilege to aid and develop an industry.