Retail sale of other goods in specialized stores dominates among industries

Final results of the 2010 Annual Survey of Philippine Business and Industry (ASPBI) showed that a total of 57,908 establishments were engaged in Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles. Of the total, establishments with total employment of less than 20 represented 91.8 percent (53,131) while the remaining 8.2 percent (4,777) for establishments with total employment of more than 20.

About 3 out of 10 establishments were engaged in Retail sale of other goods in specialized stores. Figure 1 shows the percentage distribution for wholesale and retail trade; repair of motor vehicles and motorcycles establishments by industry group.

Wholesale and retail trade establishments employ 661 thousand workers in 2010

Employment in 2010 reached a total of 660,592. Of the total, almost all or 96.9 percent were paid employees and the rest were working owners and unpaid employees.

Retail sale in non-specialized stores generated highest employment among industries with 142,204 (21.5%) employees. Retail sale of other goods in specialized stores ranked second with employment of 106,386 (16.1%) followed by retail sale of other household equipment in specialized stores with 83,196 employees (12.6%). The least number of 644 employees worked for non-specialized wholesale trade establishments. Figure 2 shows the distribution of employment by industry group.

Wholesale of household goods employees receive highest pay

A total of PHP90.5 billion compensation was disbursed to employees of the wholesale and retail trade. This translated to an average annual remuneration of PHP141,432 per paid employee. More than half or 59.4 percent of the total compensation came from establishments with total employment of more than 20 amounting to PHP53.8 billion and PHP36.7 billion for establishments with total employment of less than 20 at 40.6 percent.

Wholesalers paid PHP35.1 billion to its employees while retailers disbursed a total amount of PHP47.1 billion. Furthermore, wholesale and retail trade and repair of motor vehicles and motorcycle establishments spent PHP8.3 billion to its workers. Retail sale in non-specialized stores employees got the largest share of PHP14.3 billion among industries.

Workers in wholesale of household goods received the highest average annual compensation of PHP249,543 or an equivalent monthly compensation of PHP20,795. Wholesale of machinery equipment and supplies and non-specialized wholesale trade followed next with PHP238,898 and PHP237,219 respectively. Figure 3 shows the leading industries with highest average annual compensation by industry group.

Total revenue amounts to PHP2.4 trillion; retail sale in non-specialized store generates the largest

In 2010, gross revenue earned by the section reached PHP2.4 trillion. Wholesale trade establishments generated PHP1.0 trillion while retail trade establishments earned PHP1.2 trillion. The remaining PHP226 billion accounted for the wholesale and retail trade and repair of motor vehicles and motorcycles establishments.

Retail sale in non-specialized stores realized the highest revenue of PHP392.5 billion (16.0%) among industries. Wholesale of household goods contributed 13.9 percent (PHP339.4 billion) and other specialized wholesale shared 11.4 percent (PHP278.8 billion).

Operational cost reaches to PHP2.2 trillion

Total cost excluding compensation incurred in 2010 totaled to PHP2.2 trillion. Five industries that surpassed the PHP200 billion mark were the following: Retail sale in non-specialized stores at PHP 362.2 billion (16.1%); wholesale of household goods at PHP284.9 billion (12.7%); other specialized wholesale at PHP265.9 billion (11.8%); wholesale of food, beverages and tobacco at PHP264.8 billion (11.8%) and retail sale of other goods in specialized stores at PHP239.1 billion (10.6%).

Revenue per peso cost at 1.09 in 2010

Wholesale and retail trade; repair of motor vehicles and motorcycles establishments generated a revenue per peso cost of 1.09, which means that for every peso spent by the establishment PHP1.09 was generated. Ten out of 19 industries surpassed the national level ratio. Maintenance and repair of motor vehicles posted the highest revenue-cost ratio of 1.31 among industries.

Value added reaches PHP304 billion

Value added is defined as gross output minus intermediate cost or the spread between the value of goods/services produced and intermediate consumption. Value added generated by the section was estimated at PHP304 billion. Top four industries contributed more than half (57.0%) of the total value added generated, namely: wholesale of household goods with PHP64.4 billion (21.2%); retail sale in non-specialized stores with PHP41.8 billion (13.7%); wholesale of food, beverages and tobacco with PHP34.8 billion (11.4%) and retail sale of other goods in specialized stores with PHP 32.3 billion (10.6%).

Employees of wholesale of household goods establishments are the most productive

Value added per worker, a measure of labor productivity was estimated at PHP460.2 thousand. The most productive among industries were workers of wholesale of household goods establishments at PHP1.1 million. Figure 5 shows the value added per worker by industry group of the section for 2010.

Gross margin amounts to PHP438.6 billion

Gross margin or trade margin, the gross output of the section in 2010 reached PHP438.6 billion. Wholesale of household goods led as the top grosser contributing the highest among industries at PHP92.0 billion (21.0%). Retail sale in non-specialized stores followed with PHP64.0 billion (14.6%) and retail sale of other goods in specialized stores came in third with PHP60.4 billion (13.8%). The percentage distribution of industries to gross margin is shown in Figure 6.

Gross additions to tangible fixed assets accumulates to PHP19.1 billion

Gross additions to tangible fixed assets in 2010 for the section totaled PHP19.1 billion. The top three industries which contributed more than fifty percent of the total were the following: retail sale in non-specialized stores (37.4%), retail sale of other goods in specialized stores (12.1%), and wholesale of household goods (8.3%).

Total change in inventories values at PHP65.7 billion

Change in inventories, defined as the value of ending inventory less beginning, amounted to PHP65.7 billion for the section in 2010. Wholesale of food, beverages and tobacco accounted for more than one third (37.0%) at PHP24.3 billion of the total inventories.

Government provides PHP28.8 billion worth of subsidies

Subsidies are special grants received from the government in the form of financial assistance or tax exemption or tax privilege to aid and develop an industry. Only the wholesale of food, beverages and tobacco industry was granted a total of PHP28.8 billion worth of subsidies.

TECHNICAL NOTES

Introduction

The 2010 Annual Survey of Philippine Business and Industry (ASPBI), conducted in 2011 with 2010 as reference year, is one of the continuing activities of the National Statistics Office. It will be a source of benchmark levels on the structure and trends of economic activities in the country for the year 2010. Particularly, the data from ASPBI will be used in constructing national and regional income accounts in the country, determining and comparing regional economic structures, and formulating plans and policies of the government in the attainment of economic goals.

The conduct of the ASPBI is governed by legislative acts and presidential directives, specifically Commonwealth Act No. 591 which was approved on August 19,1940.

Scope and Coverage

The 2010 ASPBI covered establishments engaged in 18 economic sections classified under the 2009 Philippine Standard Industrial classification (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 and Maintenance of Motor Vehicles, 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)

The scope of the ASPBI was confined to "formal sector" only, which consists of the following:

• Corporations and partnership
• Cooperatives and foundations
• Single proprietorship with employment of 10 and over
• Single proprietorships with branches

Like all other establishment surveys conducted by the NSO, the 2010 ASPBI used establishment as the unit of enumeration. It is defined as "an economic unit under a single ownership or control, i.e. under a single legal entity, engaged in one or predominantly one kind of economic activity at a single fixed location".

Classification of Establishments

Before the actual selection of samples, the establishments listed in the frame were classified based on economic organization EO), legal organization (LO), industrial classification, employment size, and geographic location.

Economic organizations relates to the organizational structure or role of the establishment in the organization. The following are the types of economic organization:

• Single establishment is an establishment which has neither branch nor main office
• Branch only is an establishment which has a separate main office located elsewhere
• Establishment and main office, both located in the same address and with branches elsewhere
• Main office only is the unit which controls, supervises and directs one or more establishments of an enterprise
• Ancillary unit other than main office is the unit that operates primarily or exclusively for a related establishment or group of related establishments or its parent establishment and provides goods or services that support but do not become part of the output of those establishments

The legal organization provides the legal basis for ownership of the establishment. The following are the types of legal organization:

• Single Proprietorship refers to a business establishment organized, owned, and managed by one person, who alone assumes the risk of the business enterprise. The establishment name is that of a person, or it has words such as Owner, Proprietor or Operator
• Partnership refers to an association of two or more individuals for the conduct of a business enterprise based upon an agreement or contract between or among them to contribute money, property or industry into a common fund with the intention of dividing profits among themselves. The establishment name includes words such as Owners , Partners, Limited or LTD., Associates or ASSOCS
• Government Corporation is a private corporation organized for private aim, benefit or purpose and owned and controlled by the government. The establishment name included words such as Corporation or CORP., INCORPORATED or INC
• Private Corporation is a corporation organized by private persons. The establishment name includes words such Corporation or Corp, Incorporated or INC
• Cooperative the establishment name includes words such as Cooperative or COOP

The industrial classification classification of an economic unit is determined by the activity from which it derives its major income or revenue. The 2009 PSIC is utilized to classify units according to their economic activities. It was approved for adoption by government agencies and instrumentalities through NSCB Resolution # 2 Series of 2010 signed on February 10, 2010. It will be used for the first time for ASPBI.

The 2009 PSIC consists of an alpha character and 5 numeric digits. The alpha character, which represents the major section, is denoted by the characters A to U. They also refer to section classification. The first two numeric digits represent the division; the first three numeric digits, the group; the first four digits, the class; and the 5 digits, the sub-class.

The size of the establishment establishment is determined by its total employment (TE). The following are the employment size classification used in the 2010 ASPBI:

The geographic or physical location of the establishments was classified in accordance with the Philippine Standard Geographic Code (PSGC) as of December 31, 2010 which contains the latest updates on the number of regions, provinces, cities, municipalities and barangays in the Philippines.

The geographic domains of the 2010 ASPBI for establishments with TE of 20 and over are the 17 administrative regions while the whole country serves as the geographic domain for establishments with TE of less than 20.

Hence, the samples of the 2010 ASPBI with TE of 20 and over shall provide data for 17 administrative regions. For samples with TE of less than 20, the data that will be presented is limited only at the national level.

Response Rate

A total of 2,572 or 93.4 percent of sample establishments responded. These include receipts of “good” questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

CONCEPTS AND DEFINITIONS OF TERMS

Economic activity or business is the activity of the establishment as classified under the 2009 Philippine Standard Industrial Classification (PSIC). Generally, the main activity of the establishment is the establishment's principal source of income. If the establishment is engaged in several activities, its main activity is that which earns the biggest income or revenue.

Total employment is the number of persons who worked in or for this establishment as of November 15, 2010.

Paid employees are all persons working in the establishment and receiving pay, as well as those working away from the establishment paid by and under the control of the establishment. Included are all employees on sick leave, paid vacation or holiday. Excluded are consultants, home workers, workers receiving pure commissions only, and workers on indefinite leave.

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.

Revenue is the value of goods, products/by-products sold and/or services rendered to others whether paid in cash or is considered receivable by the establishment. Valuation of products/by products sold should be in producer's price (ex-establishment), net of discounts and allowances, including duties and charges but excluding subsidies. It also include goods transferred and/or services rendered to other establishment belonging to the same enterprise as the said establishment which should be treated as sales or as if sold to a customer; and revenue from products on a contractual basis from materials supplied by the establishment.

Cost refers to all expenses excluding compensation incurred during the year whether paid or payable. Valuation should be at purchaser 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.

Cost of goods soldrepresents the sum of the total value of goods purchased for resale and beginning inventory of goods for resale less ending inventory of goods for resale.

Gross Margin refer to the difference between the value of goods sold on own account (including commission received on sale on account of others) during the inquiry period and the gross cost of these goods. The gross cost of goods is the value of purchased of goods intended for sale adjusted for stock change of these goods during the inquiry period.

Fixed assets are physical assets expected to have productive lives of more than one year and intended for use and/or being used by the establishment. Included are land, buildings, other structures and land improvements, transport equipment, machinery and equipment, furniture, fixtures, and other fixed assets.

Valued added is gross output less intermediate input.

Gross output is equal to the sum of the total revenue (less rent income from land, delivery charges separately invoiced to customers, interest income, dividend income, royalty income, franchise income and foreign exchange gains), capital expenditures of fixed assets produced on own account and change in inventories of goods for resale; less cost of goods purchased for resale.

Intermediate cost is equal to the sum of the following cost items: materials and supplies; fuels, lubricants, oils and greases; electricity and water; cost of industrial services done by others; cost of non-industrial services done by others(less rent expense for land); research and experimental development expense; environmental protection expense; royalty fee; franchise fee; inventory of materials and supplies, fuels, lubricants, oils and greases (beginning less ending) and other cost.

Book value of tangible fixed assets is the initial value or acquisition cost of tangible fixed assets less the accumulated depreciation.

Gross additions to tangible fixed assets is the sum of cost 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.

Inventories Inventories refer to the stocks of goods owned by and 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 is equivalent to the value of inventories at the end of the year less the value at the beginning of the year.

Subsidies are special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry or production and to protect it against competition.