Real estate activities with own or leased property dominates the sector
Preliminary results of the 2010 Annual Survey of Philippine Business and Industry (ASPBI) showed that a total of 380 establishments with total employment of 20 and over were engaged in Real Estate Activities.
Real estate activities with own or leased property dominates the sector. About 9 out of 10 establishments were engaged in real estate activities with own or leased property. Figure 1 shows the percentage distribution of real estate activities establishments by industry group.
Real estate activities establishments were concentrated in the National Capital Region (NCR) wherein more than three-fourths (76.8%) of the total were based. The least number was found in the Rest of Luzon (2.4%).
Real estate activities with own or leased property employs more workers
The sector employed a total of 24,775 workers in 2010. Almost all (99.9%) were paid employees and the rest were working owners or unpaid workers.
Being the leading industry, real estate activities with own or leased property likewise employed more workers with 88.1 percent (21,833) of the total. The remaining 11.9 percent (2,942) was accounted for by real estate activities on a fee or contract basis. Figure 2 shows the employment distribution for real estate activities establishments by industry group.
At the regional level, the NCR recorded the biggest share in employment comprising more than three-fourths (18,890 or 76.2%) of the total workforce. The Rest of Luzon registered the least (259 or 1%).
Employees in real estate activities on a fee or contract basis receive higher compensation
In 2010, the sector paid a total compensation of PHP8.2 billion, equivalent to an average annual compensation of PHP331,973 per paid employee. About 90.7 percent (PHP7.5 billion) of the total was spent for gross salaries and wages and the remaining 9.3 percent (PHP762.7 million), for employer’s contribution to SSS/GSIS and the like (4.1%) and separation, retirement, terminal pay, gratuities and others (5.2%).
Almost 90 percent (PHP7.2 billion) of the total compensation was paid by real estate activities with own or leased property and the remaining portion (PHP1 billion or 12.9%), by real estate activities on a fee or contract basis.
Among regions, the NCR spent the biggest share in compensation amounting to PHP7.3 billion (88.3%) while the Rest of Luzon paid the least with PHP23.3 million (0.3%).
Employees in real estate activities on a fee or contract basis received higher average annual compensation per paid employee (PHP360,456) than those employed in real estate activities with own or leased property (PHP328,134). Figure 3 shows the average annual compensation per paid employee for real estate activities by industry group.
Workers in the NCR received the highest average annual compensation of PHP384,635 while those employed in the Rest of Luzon received the lowest with PHP90,650.
Real estate activities with own or leased property contributes the major share in revenue and cost
Gross revenue realized by the sector reached PHP275.3 billion in 2010. Real estate activities with own or leased property contributed the major share with PHP242.1 billion or 88 percent of the total. Real estate activities on a fee or contract basis shared 12 percent (PHP33.1 billion).
Total costs (excluding compensation paid to employees) amounted to PHP215 billion in 2010. As the main contributor in revenue, real estate activities with own or leased property also had the bigger share in cost (PHP198.6 billion or 92.4%) than real estate activities on a fee or contract basis with PHP16.4 billion or 7.6 percent of the total. Figure 4 shows the revenue and cost for real estate activities establishments by industry group.
Value added totals PHP95.7 billion
Value added derived by Real Estate Activities sector totaled PHP95.7 billion in 2010.
Real estate activities with own or leased property derived higher value added (PHP72.5 billion or 75.7%) than real estate activities on a fee or contract basis (PHP23.3 billion or 24.3%). Figure 5 shows the value added for real estate activities establishments by industry group.
Real estate activities on a fee or contract basis has higher labor productivity
Value added per worker, a measure of labor productivity, was estimated at PHP3.9 million. Real estate activities on a fee or contract basis surpassed the national level by PHP4 million while real estate activities with own or leased property recorded a lower ratio of PHP3.3 million.
Total change in inventories amounts to PHP24.9 billion
Total change in inventories (ending less beginning inventory) amounted to PHP24.9 billion in 2010. Real estate activities with own or leased property derived a positive value of change in inventories with PHP24.9 billion. However, real estate activities on a fee or contract basis reported a negative value of PHP2 million.
Gross addition to tangible fixed assets reaches PHP9.6 billion
Gross addition to tangible fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP9.6 billion in 2010.
Greater portion of the gross addition to tangible fixed assets was acquired by real estate activities with own or leased property with PHP9.5 billion or 98.7 percent of the total.
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 organization 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 152 or 92.7 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.
Valued added is gross output less intermediate cost.
Gross output (for Real estate activities with own or leased property) 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 real estate for sale; less cost of real estate purchased for sale.
Gross output (for Real estate activities on a fee or contract basis) is equal to the sum of total revenue (less interest income, rent income from land, dividend income, royalty income and franchise income) and capital expenditures of fixed assets produced on own account.
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); goods purchased for resale; 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; and goods for resale.
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.