Non-Bank Financial Intermediation dominated Financial Intermediation Sector
The 2000 Census of Philippine Business and Industry covered a total of 22,797 Financial Intermediation establishments. Of the total figure, 93.04 percent or 21,210 establishments had an average total employment (ATE) of less than 20, while the remaining 6.96 percent or 1,587 establishments had an average total employment of 20 and over.
By industry division, Non-bank Financial Intermediation (J66) registered the biggest number of establishments accounting for more than half (13,374 or 58.67 percent) of the total. This was followed by Banking Institutions (J65) with 7,645 establishment (33.54 percent). Activities Auxiliary to Financial Intermediation (J68) ranked third with 1,620 establishments (7.11 percent). On the other hand, establishments engaged in Insurance and Pension Funding except Compulsory Social Security (J67) recorded the least with only 158 establishments or 0.69 percent. Figure 1 shows the distribution of number of financial intermediation establishments by industry division.
Financial Intermediation Establishments were concentrated in NCR
Region wise, more than one-third (33.86 percent) or 7,719 of the total number of establishments in the country were concentrated in National Capital Region (NCR). Neighboring regions of Southern Tagalog and Central Luzon ranked second and third with 3,988 establishments (17.49 percent) and 2,668 establishments (11.70 percent) respectively.. The Cordillera Administrative Region (CAR) and Autonomous Region in Muslim Mindanao (ARMM) recorded the least in number of establishments with only 248 (1.09 percent) and 37 (0.16 percent), respectively. Figure 2 shows the distribution of number of financial intermediation establishments by region.
Banking institutions top employer in the Financial intermediation sector in 1999
Establishments involved in Financial Intermediation activities generated jobs for 266,706 workers. Of the total work force, 255,632 (95.85 percent) were paid employees and 11,074 (4.15 percent) were working owners or unpaid workers.
Top employers in the sector were Banking Institutions (J65) which employed 153,966 workers or more than half (57.73 percent) of the total employed. Non-bank Financial Intermediation (J66) establishments generated jobs for 79,261 workers or 29.72 percent share to total employment. In contrast, Insurance and Pension Funding, except Compulsory Social Security (J67) recorded the least number of workers with 14,944 persons (5.60 percent).
On the regional level, National Capital Region (NCR) which is the center of trade and industry, employed the largest (152,033 workers) accounting for more than half (57.00 percent) of total employment. Far next, was Southern Tagalog employing 25,579 workers (9.59 percent). Central Luzon rank third with 19,667 (7.37 percent) workers. On the other hand, Autonomous Region in Muslim Mindanao employed the least with only 243 (0.09 percent). (See Table 4 for the summary statistics for all financial intermediation establishments by region.)
Banking institutions employees highest earners in 1999.
Compensation paid to employees by financial intermediation establishments amounted to P 51.98 billion in 1999 or equivalent to an average annual remuneration of P 203,320.
Industry wise, Banking Institutions (J65) paid the highest compensation to its employees with an estimated amount of P 37.74 billion, accounting for almost three-fourths (72.61 percent) of the total compensation. This was followed by Non-bank Financial Intermediation (J66) with P 8.04 billion (15.46 percent). On the other hand, Activities Auxiliary to Financial Intermediation (J68) paid the least to its employees with P 2.81 billion (5.40 percent).
Highest earners were employees in Banking Institutions (J65) with an average monthly pay of P 20,488. This was closely followed by workers in Insurance and Pension Funding, except Compulsory Social Security (J67) with P 19,011 monthly pay. Whereas, workers in Non-bank Financial Intermediation (J66) establishments received the lowest average monthly pay of P 9,629. (See Table R1. Selected Ratios for All Financial Intermediation Establishments)
Region wise, National Capital Region paid the highest with P 39.25 billion or 75.52 percent of the total compensation. Southern Tagalog and Central Luzon followed with P 2.74 billion (5.27 percent) and P 2.06 billion (3.97 percent), respectively. Autonomous Region in Muslim Mindanao paid the least with only P 26.80 million (0.05 percent).
Total revenue earned by financial intermediation establishments amounted to
P 724.11 billion
The total revenue generated by the sector totaled to P 724.11 billion.
Among the industry divisions, Banking Institutions (J65) earned the highest, accounting for almost three-fourth (P 535.61 billion or 73.97 percent) of the total revenue. Non-bank Financial Intermediation (J66) placed second with P 90.04 billion (12.44 percent) and Insurance and Pension Funding, except Compulsory Social Security (J67) rank third with P 68.78 billion (9.50 percent). Activities Auxiliary to Financial Intermediation (J68) earned the least income with P 29.67 billion (4.10 percent). Figure 3 shows the distribution of revenue by industry division.
All the regions except ARMM, generated revenue exceeding a billion mark. As expected National Capital Region (NCR) had the largest contribution which comprised of P 643.15 billion or 88.82 percent of the total revenue. This was followed by Central Luzon, Southern Tagalog and Central Visayas with P 20.21 billion (2.79 percent), P 14.62 billion (2.02 percent) and P 8.43 billion (1.16 percent), respectively. All other regions in the country had a percent share to total of less than one (1.00) percent only.
Operational costs totaled to P 490.81 billion
In 1999, the operational costs spent by Financial Intermediation establishments reached P 490.81 billion.
The biggest spender in the sector was the Banking Institutions (J65), which incurred P 378.31 billion or 77.08 percent to the total costs. This was followed by Insurance and Pension Funding, except Compulsory Social Security (J67) and Non-bank Financial Intermediation (J66) with P 50.11 billion (10.21 percent) and P 47.36 billion (9.65 percent), respectively. Whereas, Activities Auxiliary to Financial Intermediation (J68) spent the least with P 15.03 billion (3.06 percent). Figure 4 shows the distribution of costs by industry division.
National Capital Region incurred the highest among the regions with an estimated value of P 424.83 billion or 86.56 percent of the total. Far next were Central Luzon with P 15.05 billion (3.07 percent), Southern Tagalog with P 13.81 billion (2.81 percent) and Central Visayas with P 7.96 billion (1.62 percent). Regions which spent least were Cordillera Administrative Region and Autonomous Region in Muslim Mindanao with P 1.31 billion (0.27 percent) and P 0.10 billion (0.02 percent), respectively.
Revenue per peso cost was valued at P1.48
The revenue per peso cost earned by Financial Intermediation establishments is 1.48, which is for every peso spent by the industry P 1.48 was generated.
Two industries in the sector had surpassed the national level rate, these were; Activities Auxiliary to Financial Intermediation (J68) with P 1.97 and Non-Bank Financial Intermediation (J66) with P 1.90. (See Table R1. Selected Ratios for All Financial Intermediation Establishments)
Total gross additions to fixed assets reached P 23.92 billion
Total gross additions to fixed assets acquired by financial intermediation establishments amounted to P 23.92 billion in 1999.
By industry division, Banking Institutions (J65) recorded the largest gross additions to fixed assets amounting to P 17.90 billion or almost three-fourths (74.81 percent) of the total. This was followed by Insurance and Pension Funding, except Compulsory Social Security (J67) with an estimated value of P 3.09 billion (12.92 percent). However, Activities Auxiliary to Financial Intermediation (J68) posted the smallest in gross additions to fixed assets amounting to P 603 million (2.52 percent).
Total change in inventories summed to P 550.58 million
From the inventory reports of financial intermediation establishments, change in inventories summed up to P 550.58 million in 1999.
Of the total, Non-bank Financial Intermediation (J66) registered the highest total change in inventories amounting to P 434.47 million or accounting for 78.91 percent of the total. This followed by Banking Institutions (J65) with P 94.54 million (17.17 percent). On the other hand, Activities Auxiliary to Financial Intermediation (J68) recorded the least which showed a negative change in inventories of P 471 thousand.
Subsidies provided by government amounted to P 779.53 million
The total subsidies provided by government to support the operation of financial intermediation establishments reached P 779.53 million.
Industry wise, Non-bank Financial Intermediation (J66) received the biggest share in subsidies amounting to P 499.76 million or 64.11 percent of the total. Banking Institutions (J65) placed second which comprised of P 242.01 million (31.05 percent). Meanwhile, Insurance and Pension Funding, except Compulsory Social Security (J67) received the least in subsidies which amounted to P 18.30 million (2.35 percent) from the government.
Scope and Coverage:
The 2000 Census of Philippine Business and Industry (CPBI) aimed to collect benchmark information on economic activities of establishments in the entire country. It has the calendar year, 1999, for its reference period. One of the fourteen (14) sectors covered in the census was the financial intermediation sector (Sector J). The sector is composed of banking institutions (J65); non-bank financial intermediation (J66); insurance and pension funding, except compulsory social security (J67) and activities auxiliary to financial intermediation (J68).
All financial intermediation establishments nationwide with average total employment (ATE) of 20 and over were covered on a 100 percent basis and those with ATE of less than 20 were selected using probability proportional to size sampling.
The 2000 CPBI covered 3,834 financial intermediation establishments with a response rate of 67 percent. Adjustments for non-response were made through imputations.
Concepts and Definitions of Terms
Establishments - An economic unit under single ownership or control, i.e., under a single entity, engaged in one or predominantly one kind of economic activity at a single fixed location, and having permanency of assets in its premises during the operation. It is also defined as the unit that is engaged in the production of the most homogenous group of good 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.
Financial Establishments - Bank, savings and loan association, credit institution, pawnshop, financial institution, trust company, investment company, pawn broker, or institution engaged in accepting of deposits, granting loans and the investment of money; dealer, broker or office engaged in investment research and counseling, check cashing, stock quotation, foreign exchange dealing and other financial services.
Insurance, Pre-Need Plan Companies and Pension Funding Establishment - Life insurance companies; non-life insurance for fire, marine, accident, health, title, financial obligation, casualty, fidelity and surety; agents and brokers servicing insurance carriers, consultant for policyholders; fund managers.
Economic Activity - Is the activity of the establishment as classified under the 1994 Philippine Standard Industrial Classification (PSIC). The main activity refers to the activity that contributes the biggest or major portion of the gross income or revenue of the establishment.
Average Total Employment (ATE) - The sum of the number of persons who worked in or for this establishment for each month of the year divided by 12 regardless of the number of months this establishment was in operation in 1999.
Paid Employees - Include full-time and part-time employees, employees on sick or maternity leave and on paid vacation or holiday, employees working away from the establishment and paid by and under the control of the establishment and employees on strike.
Unpaid Workers - Include working owners who do not receive regular pay, apprentices and learners without regular pay, and persons working for at least 1/3 of the working time normal to the establishment without regular pay.
Salaries and Wages - Payments in cash or in kind, prior to deduction for employee?s contribution to SSS/GSIS, withholding tax, etc. Included are total basic pay, vacation, sick, maternity leave pay, overtime pay and other benefits.
Revenue - The value of products/by-products sold and/or services rendered to others whether paid in cash or is considered as receivable by this establishment. It included goods transferred and/or services rendered to other establishment belonging to the same enterprise as this establishment.
Costs - Refers to all expenses excluding compensation incurred during the year whether paid or payable. Valuation should be at market price including taxes and other charges, net of discounts, rebates, returns and allowances. Goods received from and services rendered by other establishment of the same enterprise are valued as though purchased.
Gross Addition to Fixed Assets - Sum of costs of new and used fixed assets acquired during the year, cost of alteration and improvements done by others and cost of fixed assets produced by the establishment less the value of sales of fixed assets during the year.
Fixed Assets - Physical assets expected to have productive life of more than one year and intended for use and or being used by the establishment. Included are land, buildings, fixtures, machinery, tool, furniture, office equipment, vehicles and the like.
Inventories - Refer to stocks of goods owned by or under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation should be at current replacement cost in purchaser's price at the indicated dates. Replacement cost is the cost of an item in terms of its present price rather than its original price.
Change in Inventories - This is equivalent to the total value of inventories at end of the year less the value at the beginning of the year.
Subsidies - These are special grants in the form of financial assistance or tax exemption or tax privilege received from the government to aid and develop industry.
Source: National Statistics Office