Architectural and engineering activities and related technical consultancy industry dominates the sector
Preliminary results of the 2010 Annual Survey of Philippine Business and Insudtry (ASPBI) showed that the Philippines had a total of 586 establishments with Total Employment (TE) of 20 and over engaged in Professional, Scientific and Technical Activities. Figure 1 shows that architectural and engineering activities and related technical consultancy registered the highest number of establishment with 148, comprising 25.3 percent of the total. Advertising, ranked second with 17.6 percent and management consultancy activities, third with 16.4 percent.
More than half of the establishments are located in the National Capital Region (NCR)
There were six regions in the country for Professional, Scientific and Technical Activities section without representative samples for establishments with TE of 20 and over, namely: Regions I, II, IV-B, XII, Caraga and ARMM. Across major island group, 88.6 percent of the establishments were located in NCR followed by Rest of Luzon with 6.0 percent. Establishments located in Mindanao areas registered the least with only 2.4 percent.
Architectural and engineering activities and related technical consultancy industry employ the most number of workers
In 2010, establishments engaged in Professional, Scientific and Technical Activities generated jobs for 53,140 persons. Majority (99.5%) were paid employees while the remaining 0.5 percent were unpaid workers.
Architectural and engineering activities and related technical consultancy, having the most number of establishments also employed the most number of workers with 15,975 (30.1%). Establishments engaged in management consultancy activities and advertising ranked second and third with 10,191 employees (19.2%) and 6,981 employees (13.1%), respectively. (See Fig.2)
In terms of ratio of employment per establishment, an estimated 91 workers per establishment were recorded for the sector. The labor-intensive industry was registered in research and experimental development on natural sciences and engineering industry with 177 workers per establishments.
By major island group, NCR was the top employer with generated jobs of 43,050 employees (81.0%). This was followed by Rest of Luzon, Visayas and Mindanao areas with 7,794 employees (14.7%), 1,718 employees (3.2%) and 578 employees (1.1%), respectively.
Management consultancy activities establishments pay the highest compensation
Total compensation paid by Professional, Scientific and Technical Activities establishments amounted to PHP21.7 billion. This translates to PHP410.5 thousands average annual compensation per paid employee. Of the total, PHP20.4 billion (93.9%) comprised the gross salaries and wages, PHP793.3 million (3.7%) were employer’s contribution to SSS/GSIS and the like and the remaining PHP530.4 million (2.4%) were the separation, retirement or terminal pay, gratuities and others.
By industry group, management consultancy activities paid the highest compensation to its employees amounting to PHP6.0 billion or 27.7 percent of the total. This was followed by architectural and engineering activities and related technical consultancy which paid PHP5.8 billion (26.8%). Establishments engaged in advertising activities ranked third with PHP3.0 billion (13.8%).
Across major island group, NCR registered the highest remuneration paid to its employees with PHP20.1 billion (92.7%) of the total compensation. Followed by Rest of Luzon with PHP1.0 billion (4.7%). Establishments based in Visayas and Mindanao areas registered the least compensation with PHP424.5 million (2.0%) and PHP133.1 million (0.6%), respectively.
Employees in Management consultancy activities industry earns the highest
The sector’s average annual compensation in 2010 reached PHP410,487. Employees in management consultancy activities establishments surpassed the national average annual compensation with PHP590,177 followed by employees in advertising and research and experimental development on natural sciences and engineering establishments with PHP433,985 and PHP380,563 average annual compensation, respectively. (See Fig.3)
By major island group, workers based in NCR received the highest average annual compensation of PHP469,920 while employees from Rest of Luzon received the least with PHP132,080.
Industy engaged in Architectural and engineering activities and related technical consultancy earns the largest
The total revenue generated by the Professional, Scientific and Technical Activities establishments amounted to PHP76.0 billion. Establishments engaged in architectural and engineering activities and related technical consultancy operations was the top contributor with revenue of PHP16.4 billion or 21.6 percent of the total. Activities of head offices industry ranked second with PHP15.8 billion (20.8%). Management consultancy activities industry generated revenue of PHP15.7 billion (20.7%). (See Fig.4)
Across major island group, NCR being the center of economic activities in the country, earned the highest revenue amounting to PHP68.7 billion (90.4%). Establishments based in Visayas areas registered the least revenue with PHP840.3 million (1.1%).
Activities of head offices industry spends the highest for its operation
The total costs for operating the Professional, Scientific and Technical Activities establishments reached PHP44.5 billion in 2010. Activities of head offices industry spent the highest cost with PHP12.9 billion (28.9%) followed by management consultancy activities industry with PHP9.4 billion (21.1%). (See Fig.4)
Across major island group, NCR spent the highest cost for operating the industry with PHP40.50 billion (91.1%). This was followed by establishments located in the Rest of Luzon with PHP2.9 billion, accounting for 6.4 percent of the total cost.
Accounting, bookkeeping and auditing activities; tax consultancy industry records the highest returns
In 2010, the revenue per peso cost generated by the sector amounted to 1.71. Among industries, accounting, bookkeeping and auditing activities; tax consultancy recorded the highest and surpassed the national average with 3.45 revenue per peso cost. This was followed by advertising industry with 2.25 and market research and public opinion polling with 2.19 revenue per peso cost.
Activities of head offices industry contributes the largest value added
The total value added contributed by the Professional, Scientific and Technical Activities establishments was estimated at PHP43.1 billion. Industry-wise, activities of head offices industry registered the largest value added with PHP11.2 billion (25.9%) followed by architectural and engineering activities and related technical consultancy industry with PHP8.6 billion (20.0%). (See Fig.5)
Across major island group, NCR contributed the largest value added with PHP39.1 billion or 90.6 percent of the total. This was followed by establishments located in Rest of Luzon with PHP3.1 billion (7.3%). The rest of the major island group contributed of less than two percent to total value added.
Activities of head offices industry employees registers the highest revenue per employee
The Professional, Scientific and Technical Activities establishments generated PHP1.4 million of revenue per employee in 2010. This is one of Labor productivity indicators and is measured in terms of revenue per employee. Employees of activities of head offices industry acquired the highest revenue per employee with PHP11.0 million and surpassed the national ratio. Followed by employees in research and experimental development on natural sciences and engineering industry with PHP1.6 million.
Value added per worker, another measure of labor productivity, was valued at PHP810.9 thousands. Industry-wise, activities of head offices industry recorded the highest ratio with PHP7.8 million per worker. This was followed by advertising industry with an estimated ratio of PHP738.5 thousand per worker. Employees in technical testing and analysis industry ranked third with PHP712.2 thousand per worker.
Gross addition to fixed assets totals to PHP3.7 billion
The Professional, Scientific and Technical Activities establishments gross addition to fixed assets totaled to PHP3.7 billion in 2010. Technical testing and analysis industry registered the highest additions to fixed assets with PHP1.9 billion (51.9%). This was followed by activities of head offices industry with PHP626.4 million (16.9%).
Government grants PHP11.3 million to aid operations in this sector
The total subsidies received by Professional, Scientific and Technical Activities establishments reached PHP11.3 million in 2010. Establishments engaged in technical testing and analysis received the highest subsidies amounting to PHP6.7 million (59.5%). This was followed by architectural and engineering activities and related technical consultancy with PHP4.6 million (40.5%). Other industries did not receive any subsidy from the government.
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
- Mining and Quarrying
- Electricity, Gas, Steam and Air Conditioning Supply
- Water Supply, Sewerage, Waste Management and Remediation Activities
- Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles
- Transportation and Storage
- Accommodation and Food Service Activities
- Information and Communication
- Financial and Insurance Activities
- Real Estate Activities
- Professional, Scientific and Technical Services
- Administrative and Support Service Activities
- Human Health and Social Work Activities
- 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
- Stock Corporation is an ordinary business corporation organized by private persons, created and operated for the purpose of making a profit which may be distributed in the form of dividends to stockholders on the basis of their invested capital. The establishment’s name includes words such Corporation or Corp, Incorporated or INC
- Non-Stock, Non-Profit Corporation is a business corporation which does not issue stocks to its members and is created not to profit but for the public good and welfare. Of this character are most of the religious, social, charitable, educational, literary, scientific, civic and political organizations and societies. The establishment’s name includes words such as Corporation or Corp., Incorporated or Inc.
- Cooperative is an organization composed primarily of small producers/consumers who voluntarily join together to form a business enterprise, which they themselves own, control and patronize. The establishment’s name includes words such as Cooperative or COOP
- Others are organizations not classified in any of the above classification. It includes private associations, foundations, Non-Governmental Organization, or other forms of legal organizations.
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.
The 2009 PSIC consists of an alpha character and 5 numeric digits. The alpha character, which represents the major division, is denoted by the characters A to S. 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:
1 – 4
100 – 199
5 – 9
200 – 499
10 – 19
500 – 999
20 – 49
1000 – 1999
50 - 99
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 307 or 96.5 percent of sample establishments with Total Employment of 20 and over 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.
Valued added is gross output less intermediate cost.
Gross output is equal to the sum of 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 inventory of goods for resale; less cost of goods purchased for sale.
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 and other cost; less change in inventory of materials and supplies; fuels, lubricants, oils and greases.
Tangible 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 tangible 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.
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.