Number of establishments in 2010 decrease by 0.7 percent
The final results of the 2010 Annual Survey of Philippine Business and Industry (ASPBI) revealed that the Philippines had a total of 148,266 establishments belonging in the formal sector in 2010. This number showed a 0.7 percent decline compared with the 149,386 recorded establishments in 2009.
As shown in Figure 1, Wholesale and retail trade, repair of motor vehicles and motorcycles with 57,908 establishments comprised 39.1 percent of the total number of establishments in 2010. Manufacturing with 16,269 establishments accounted for 11.0 percent of the total number of establishments while Accommodation and food service activities recorded 14,937 establishments or 10.1 percent share of the total. Placing fourth and fifth in terms of number of establishments were Financial and insurance activities and Education establishments numbering 14,213 (9.6%) and 9,949 (6.7%), respectively. On the other hand, the least number of establishments were recorded for Mining and quarrying with 110 establishments or 0.1 percent of the total.
One out of four employed works in manufacturing
Industry-wide, total employment in 2010 increased by 0.6 percent to 3,966,110 from 3,942,412 in 2009. For the reference period (Figure 2), Manufacturing had the highest number of workers (978,027), accounting for 24.7 percent of the total employment in 2010. Wholesale and retail trade, repair of motor vehicles and motorcycles with 660,592 workers (16.7%) and Administrative and support service activities with 523,709 workers (13.2%) settled for second and third posts. At far fourth was the Education industry with 315,676 workers or 8.0 percent of the total employment. Mining and quarrying and Water supply; sewerage, waste management, and remediation activities had the least number of workers accounting for 0.7 percent each.
At the national level, average number of workers for all establishments was recorded at 27 in 2010, higher by one worker as reported in 2009 (26). Highest average number of workers per establishment in 2010 was recorded for Mining and quarrying with 244 workers followed by Electricity, gas, steam and air conditioning supply with 208 workers per establishment. Construction industries registered third highest with 95 workers. Among the 18 sections (major industries), seven reported less than the national average to wit: Entertainment and recreation, 22; Accommodation and food service activities, 19; Financial and insurance activities, 16; Professional, scientific, and technical activities, and Real estate activities, 14; Wholesale and retail trade, repair of motor vehicles and motorcycles, 11; and Other service activities, 9.
Workers in the Manufacturing industry receive highest compensation
Total compensation paid in 2010 amounted to PHP824.89 billion, an increase of 3.7 percent over the PhP795.65 billion paid in 2009. This amount consisted of gross salaries and wages paid to employees plus employer’s contribution to Social Security Services (SSS), Government Social Insurance Service (GSIS) and other contributions paid by establishments in 2010. Almost one-fourth (24.7%) of the total compensation paid in 2010 was contributed by Manufacturing industries with PHP204.05 billion. Administrative and support service activities establishments paid the second highest in terms of compensation for PHP103.21 billion (12.5%). Financial and insurance activities and Wholesale and retail trade, repair of motor vehicles, and motorcycles both accounted for 11.0 percent of the total compensation paid in 2010. However, Other service activities (0.5%) contributed the least amount to total compensation.
Meanwhile, average annual compensation in 2010 reached PHP211,615, a 2.9 percent increment compared to PHP205,659 in 2009 (Figure 3). Employees engaged in Electricity, gas, steam and air conditioning supply was the recipient of the highest average annual compensation in 2010 amounting to PHP539,900. Second highest paid in 2010 were employees in the Information and communication industries at PHP498,075 followed by Financial and insurance activities with PHP406,688. Employees in the Other service activities industries receiving only PHP109,279 per year were least paid.
Manufacturing top revenue earner in 2010
Total revenue or total sales earned by all establishments in 2010 grew by 10.8 percent to PHP10.19 trillion from PHP9.20 trillion in 2009. More than one-third (35.5%) of the total revenue earned in 2010 was contributed by Manufacturing industries, accounting for PHP3.62 trillion. Second highest revenue earner was Wholesale and retail trade, repair of motor vehicles and motorcycles with PHP2.45 trillion or 24.0 percent of the total. This was followed by Financial and insurance activities with PHP970.22 billion (9.5%) and Electricity, gas, steam and air conditioning supply with PHP856.78 billion (8.4%). Other service activities had the least revenue contribution for the reference period for PHP16.92 billion or 0.2 percent.
Manufacturing establishments remain highest spender
Total cost incurred for all establishments whether paid or payable in 2010 grew by 12.0 percent to about PHP7.60 trillion over the PHP6.78 trillion spent in 2009. Manufacturing, remained the highest spender in 2010 with PHP2.81 trillion, more than one-third (37.0%) of the total cost. Next highest spender was Wholesale and retail trade, repair of motor vehicles and motorcycles with PHP2.25 trillion (29.6%). Electricity, gas, steam and air conditioning supply posted third highest with PHP577.63 billion (7.6%). Other service activities spent the least (0.1%) with PHP11.32 billion (Figure 4).
Revenue per peso cost computed as the ratio of total revenue to total cost for all establishments was computed at 1.34 in 2010. This means that in terms of revenue, PHP1.34 was realized for every peso spent by all establishments in 2010. This value was lower than the value computed in 2009 which was 1.36. Of the 18 major industries, 13 exceeded the revenue per peso cost computed for all establishments in 2010. Meanwhile, top three major industries for this indicator were Administrative and support service activities, 2.62; Education, 2.52; and Entertainment and Recreation, 2.06. Wholesale and retail trade with 1.09 registered the least revenue per cost ratio.
Manufacturing accounts for 31.5 percent of total value added
Value added, an indicator which measures the value of output minus the intermediate inputs generated by all establishments rose by 11.6 percent to PHP3.28 trillion in 2010 from PHP2.94 trillion in 2009.
Manufacturing accounted 31.5 percent of the total value added in 2010. Financial and insurance activities with PHP573.45 billion or 17.5 percent ranked second, followed by Electricity, gas, steam and air conditioning supply with PHP315.78 billion or 9.6 percent. Other service activities, sharing 0.2 percent to the total value added or PHP6.83 billion, posted the lowest (Figure 5).
One measure of labor productivity is value added divided by total employment or value added per worker. Using this measure, labor productivity for all establishments in 2010 was valued at PHP826,358. Electricity, gas, steam and air conditioning supply were the most productive in 2010 with a value added per worker of PHP6.58 million. Real estate activities with about PHP2.80 million and Financial and insurance activities with PHP2.49 million posted second and third places, respectively. Other service activities with PHP165,18 had the lowest value added per worker.
Gross additions to tangible fixed assets up by 9.3 percent
At the national level in 2010, gross additions to tangible fixed assets put up by establishments totaled PHP315.68 billion, up by 9.3 percent from its reported value in 2009 (PHP288.70 billion). Almost a third of the total tangible fixed assets (28.0%) were acquired by Manufacturing amounting to PHP88.34 billion. Information and communication industries contributed 21.3 percent with a value of PHP67.31 billion. Other service activities acquired the least amount of additions to its fixed assets in 2010 amounting to PHP438.53 million (0.1%).
Wholesale and retail trade posts highest change in inventory
Change in inventories, defined as the value of ending inventory less beginning, amounted to PHP145.76 billion in 2010, more than three times the value in 2009 recorded at PHP44.12 billion. Across industries, Wholesale and retail trade, reported the highest change in inventory for PHP65.68 billion (45.1%). Manufacturing came in next with PHP51.87 billion (35.6%) followed by Real estate activities with PHP19.13 billion (13.1%). However, three major industries exhibited a negative change in inventories in 2010: Education, -PHP35.84 million, Entertainment and recreation, -PHP47.94 million and Mining and quarrying, -PHP419.45 million.
Wholesale and retail trade receives highest subsidy in 2010
Subsidies received by all establishments in 2010 summed up to PHP43.09 billion, a 19.8 percent increase over the PHP35.97 billion granted to all establishments in 2009. 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.
Wholesale and retail trade received the largest amount of subsidy equivalent to PHP28.80 billion or 66.8 percent of the total subsidy in 2010. Other major industries that received billion mark subsidies from the government in 2010 were Transportation and storage, PHP5.84 billion (13.5%); Financial and Insurance activities; PHP3.22 billion (7.5%); Electricity, gas, steam, and air conditioning supply, PHP1.75 billion (4.1%) and Education, PHP1.62 billion (3.8%). However, Construction, Accommodation and food service activities, Real estate activities, Human, health and social work activities and Other service activities reported not receiving any government subsidy in 2010.
The 2010 Annual Survey of Philippine Business and Industry (ASPBI) is a continuing activity of the National Statistics Office (NSO) which aims to provide key measures on the performance, levels, structure and trends of economic activities in the entire country for the year 2010. It is one of the designated statistical activities of the government and as such the survey generates the most critical and essential statistics required for economic planning and analysis.
The 2009 Philippine Standard Industrial Classification (PSIC) was adopted for the first time in this round. This is the latest version of the classification of industries in the country released by the NSCB after the 1994 PSIC was amended in 2002. It conforms with the International Standard Industrial Classification (ISIC) Revision 4 prescribe by the United Nations, but with modifications to suit national situation and requirement. The PSIC is a statistical classification of all economic activities, designed as a guide and a comprehensive framework for securing uniformity and comparability of both the government and private sectors.
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
- Mining and Quarrying
- Electricity, Gas, Steam and Air Conditioning Supply and Water Supply
- Water Supply; Sewerage, Waste Management and Remediation Activities
- Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles
- Transport and Storage
- Accommodation and Food Service Activities
- Information and Communication
- Financial and Insurance Activities
- Real Estate Activities
- Professional, Scientific and Technical Activities
- Administrative and Support Service Activities
- Human Health and Social Work
- Arts Entertainment, and Recreation
- Other Service Activities
The scope of the ASPBI was confined to “formal sector” only, which consists of the following:
- Corporations and partnership
- Cooperatives and foundations
- Single proprietorships with employment of 10 or more
- 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 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 No. 2 Series 2010 signed on February 10, 2010. It will be used for the 1st time for the 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 sector 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 is determined by its total employment (TE). The following are the employment size classification used in the 2010 ASPBI:
|TE Code||Total Employment||TE Code||Total Employment|
|0||1 – 4||5||100 – 199|
|1||5 – 9||6||200 – 499|
|2||10 – 19||7||500 – 999|
|3||20 – 49||8||1000 – 1999|
|4||50 - 99||9||2000 & over|
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.
A total of 27,842 or 95.1 percent of sample establishments responded. These include receipts of “good” questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments. Table below shows the response rate by section (major industry).
TABLE 1 Response Rates by Section (Major Industry)
|2009 PSIC||Industry Description||No. of Samples||No. of Responding Establishments||Response Rate|
|A||Agriculture, Forestry and Fishing||813||792||97.4|
|B||Mining and Quarrying||162||151||93.2|
|D||Electricity, Gas, Steam and Air Conditioning Supply||223||212||95.1|
|E||Water Supply; Sewerage, Waste Management and Remediation Activities||238||235||98.7|
|G||Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles||8,159||7,679||94.1|
|H||Transportation and Storage||917||867||94.5|
|I||Accommodation and Food Service Activities||1,904||1,796||94.3|
|J||Information and Communication||2,082||2,008||96.4|
|K||Financial and Insurance Activities||1,426||1,306||91.6|
|L||Real Estate Activities||444||413||93.0|
|M||Professional, Scientific and Technical||977||938||96.0|
|N||Administrative and Support Service Activities||1.597||1,509||94.5|
|Q||Human Health and Social Work Activities||835||811||97.1|
|R||Arts, Entertainment, and Recreation||384||374||97.4|
|O||Other Service Activities||872||836||95.9|
CONCEPTS AND DEFINITIONS OF TERMS
Economic activity or business is the activity of the establishment as classified under 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’s 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.
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.
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.
Valued added is gross output less intermediate input. Gross output for Human Health and Social Work Activities is the sum of the total revenue (less interest income, rent income from land, dividend income, royalty income and franchise income), capital expenditures of fixed assets produced on own account and change in inventories. Intermediate input is equal to the sum of the following cost items: materials and supplies purchased; fuels, lubricants, oils and greases purchased; electricity and water purchased; cost of industrial services done by others; cost of non-industrial services done by others; goods purchased for resale; research and experimental development expense; environmental protection expense; royalty fee; franchise fee and other cost.
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 total 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.