Other financial service activities, except insurance and pension funding industry, lead the sector

Final results of the 2012 Census of Philippine Business and Industry showed that a total of 6,961 establishments were engaged in Financial and Insurance Activities.

Other financial service activities, except insurance and pension funding, comprised 5,127 (73.7 percent) of the total number of establishments. This was followed by establishments engaged in monetary intermediation with 690 (9.9 %). Ranked third were establishments engaged in activities auxiliary to insurance and pension funding and fund management with 336 (4.8%). (See Figure 1)

 

 

Majority of establishments are in the National Capital Region (NCR)

At the regional level, NCR had the most number of establishments with 29.5 percent (2,055). CALABARZON and Central Luzon placed far second and third with 10.7 percent and 9.8 percent, respectively. ARMM region had the least with only 25 establishments. (See Table 2)

 

Other financial service activities, except Insurance and pension funding industry employs the highest number of workers

The sector employed a total of 308,630 workers in 2012. Of the total, almost all (99.1%) were paid employees and the rest were working owners or unpaid workers.

Other financial service activities, except insurance and pension funding activities employed almost half of the number of workers 138,252 (44.8 %).  Monetary intermediation activities followed with 132,446 employees (42.9%). Ranked third was insurance activities with 14,763 employees or 4.8 percent. (See Fig. 2)

 

 

Region wise, NCR recorded the biggest share in employment comprising 67.1 % (207,125) of the total workforce.  Davao Region placed a far second with 8.7 percent (26,910) and Central Visayas third, with 3.9 percent (11,903). ARMM registered the least with 157 employees.

 

Workers in monetary intermediation are the highest-paid employees

The sector paid in 2012 a total compensation of PHP148.5 billion, equivalent to an average annual compensation of PHP485.2 thousand per paid employee.

Industry wise, monetary intermediation paid the highest compensation of PHP82.9 billion comprising more than half (55.8%) of the total. Other financial service activities, except insurance and pension funding activities placed far second with PHP26.4 billion or 17.8 percent. Activities of holding companies ranked third with PHP17.5 billion or 11.8 percent. On the other hand, pension funding recorded the lowest amount of PHP109.0 million (0.07%).

Among regions, NCR spent the biggest share in total compensation amounting to PHP132.8 billion (89.4%). Davao Region and Central Visayas were in second and third place with PHP4.0 billion (2.7%) and PHP2.4 billion (1.6%), respectively.

Workers in activities of holding companies were the highest-paid employees receiving an average annual compensation of PHP8,222.5 thousand per annum surpassing the sector’s average of PHP485.2 thousand per annum.  Employees of trusts, funds and other financial vehicles and insurance activities followed next with PHP948.7 thousand and PHP667.7 thousand, respectively.   However, those employed in pension funding activities were paid only PHP194.2 thousand. (See Fig. 3)

 

 

Employees working in NCR received the highest average annual compensation of PHP642.9 thousand while those employed in ARMM received the lowest with PHP65.2 thousand.

 

Monetary intermediation activities contribute the biggest share in income and expense

Gross income realized by the sector reached PHP1,127.3 trillion in 2012.  Monetary intermediation activities had the biggest share with PHP508.4 billion or 45.1 percent of the total. Activities of holding companies ranked second with PHP275.6 billion (24.4%).  Insurance activities ranked third with PHP132.8 billion (11.8%).

Total expenses incurred amounted to PHP775.4 billion in 2012.  Being the major contributors in income, monetary intermediation activities and activities of holding companies also had the largest proportion in expense with PHP368.9 billion (47.6%) and PHP132.8 billion (17.1%), respectively.  However, pension funding activities incurred the lowest expense of PHP380.1 million (0.05%).   Figure 4 shows the top five industry groups in income and expense.

 

 

Value added amounts to PHP593 billion

Value Value added realized by financial and insurance sector totaled PHP593 billion in 2012.

Industry wise, monetary intermediation activities registered the highest value added with PHP291.1 billion (49.1%).  Activities of holding companies ranked second with PHP179.4 billion (30.3%) and other financial service activities, except insurance and pension funding ranked third with PHP79.2 billion (13.4%).  On the other hand, pension funding recorded the least with PHP298.3 million (0.05%). (See Fig. 5)

 

Other financial services, except insurance and pension funding has the highest e-commerce sales

Only four industries reported e-commerce sales for the year 2012.  E-commerce sales reached PHP1.7 billion in 2012.  The highest was reported by establishments engaged in other financial services, except insurance and pension funding amounting to PHP892.2 million or 53.8 percent of the total.  This was followed by activities auxiliary to financial service, except insurance and pension funding with PHP412.7 million (24.9%) and by trusts, funds and other financial vehicles with PHP351.8 million or 21.2 percent.  Monetary intermediation reported the least with only PHP285 thousand.

 

Activities of holding companies has the highest labor productivity

Value added per employee, a measure of labor productivity, was estimated at PHP1.9 million. Activities of holding companies led the sector with PHP82.7 million while insurance activities registered, the lowest with PHP399.8 thousand.

 

Gross addition to fixed assets reaches PHP23.1 billion

Gross addition to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP23.1 billion in 2012.

Monetary intermediation activities acquired the biggest gross addition to fixed assets with PHP10.1 billion (43.6%).  This was followed by activities of holding companies and other financial service activities, except insurance and pension funding with PHP9.5 billion and PHP2.1 billion respectively.  On the other hand, pension funding had the least amount of gross additions to fixed assets with PHP1.03 million.

 

Total change in inventories in 2012 lesser by PHP1.4 billion

Total change in inventories (ending less beginning inventory) amounted to negative PHP1.4 billion in 2012. Other financial service activities, except insurance and pension funding activities had the highest positive change in inventory with PHP1.2 billion.  Activities of holding companies followed with PHP203.4 million. On the other hand, insurance activities, together with monetary intermediation and pension funding reported a negative value of change in inventories.

 

Total subsidies received from the government amounts to PHP4.0 billion

Total subsidies received from the government amounted to PHP4.0 billion in 2012.  Only four industry groups received subsidies from the government.  These were activities auxiliary to insurance and pension funding, and fund management activities, other financial services activities, except insurance and pension funding, insurance and trusts, fund and other financial vehicles received PHP3.2 billion, PHP514.9 million, PHP280.3 million and PHP7.9 million respectively in 2012.

  

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TECHNICAL NOTES

Introduction

This Special Release presents the final results of the 2012 Census of Philippine Business and Industry (CPBI) for the Financial and Insurance Activities sector for establishments with total employment of 20 and over.

The 2012 CPBI is the forerunner of the 2006 CPBI and one of the designated statistical activities of the former National Statistics Office (NSO) now Philippine Statistics Authority (PSA). Data collected from the census will provide information on the levels, structure, performance and trends of economic activities of the formal sector of the economy for the reference period 2012.  It will also serve as benchmark information in the measurement and comparison of national and regional economic growth.

To provide establishment respondents ease in accomplishing the 2012 CPBI questionnaires, the income and expense account in the Financial Statement of establishment was adopted in the design of 2012 CPBI sectoralquestionnaires. Income and revenue have the same concept in recording financial transaction of establishments while expense is cost incurred on a consumed basis.

Data collection was intensified through the use of web-based or online accomplishment of questionnaire through the NSO website and downloading of e-questionnaire and submission thru e-mail.

 

Legal Authority

The conduct of the CPBI is governed by authority of the following legislative acts and presidential directives:

• Commonwealth Act No. 591 An Act to Create the Bureau of the Census and Statistics to consolidate statistical activities of the government therein which was approved on August 19, 1940. This empowers the Bureau, among other things, to prepare for and undertake all censuses of population, agriculture, industry and commerce.

• Presidential Decree No. 418 dated March 20, 1974 reconstituted the Bureau of the Census and Statistics as a new agency to be known as the National Census and Statistics Office (NCSO), under the administrative supervision of the National Economic Development Authority (NEDA).

• Executive Order No. 121 Reorganization Act of the Philippine Statistical System, dated August 4, 1987 renamed the National Census and Statistics Office (NCSO) to National Statistics Office which shall be the major statistical agency responsible for generating general purpose statistics and undertaking such censuses and surveys.

• Executive Order 352 Designation of Statistical Activities that will generate critical data for decision-making by the Government and the Private Sector, dated July 1, 1996.

• Executive Order 5 Strengthening the National Statistics Office, dated July 29, 1998.

   

Scope and coverage

The 2012 CPBI was a nationwide undertaking confined to the formal sector of the economy and as such excluded the informal sector. The following comprise the formal sector:

1. Corporations and partnerships

2. Cooperatives and foundations

3. Single establishment with employment of 10 or more

4. Single proprietorship with branches

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

• All establishments with total employment (TE) of 10 or more, and; 

• All establishments with TE of less than 10, except those establishments with Legal Organization = 1 (single proprietorship) and Economic Organization = 1 (single establishment), that are engaged in economic activities classified according to the 2009 Philippine Standard Industrial Classificatin (PSIC). 

The initial count of the 2012 List of Establishments (LE), the frame used to draw the sample establishments for the 2012 CPBI, registered a total of 945,000 establishments in operation nationwide in 2012.  Out of this number, 72 percent or 680,400 establishments belong to the informal sector and only 28 percent or 262,800 establishments made up of the formal sector.

Listed below are the 18 economic sectors within the scope of the 2012 CPBI classified under the 2009 Philippine Standard Industrial Classification (PSIC).

• 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 of Motor Vehicles and Motorcycles (G)

• Transport 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)

• Private Education (P)

• Human Health and Social Work Activities (Q) 

• Arts Entertainment, and Recreation (R)

• Other Service Activities (S)

 

Unit of Enumeration

The unit of enumeration for the 2012 CPBI was the establishment. An establishment is defined as an economic unit, which engages, under a single ownership or control, in one or predominantly one kind of activity at a single fixed physical location.

 

Classification of Establishments

An establishment is categorized by its economic organization (EO), legal organization (LO), industrial classification, employment size, and geographic location.

Economic organization (EO).   This refers to the organizational structure or role of the establishment in the organization. The following are the types of economic organization:

• Single establishment (EO=1) is an establishment which has neither branch nor main office.  It may have ancillary unit/s, other than main office, located elsewhere. 

• Branch (EO=2) is an establishment which has a separate main office located elsewhere.

• Establishment and main office (EO=3) is one where the establishments is located in the same address as the main office and with branch/es elsewhere.

• Main Office (EO=4) is a unit which controls, supervises and directs one or more establishments of an enterprise.

• Ancillary unit other than Main Office (EO=5) is a unit that operates primarily or exclusively for a related establishment or group of related establishments or its parent establishment and provides services that support those establishments.

Legal organization (LO) This refers to the legal form of the economic entity provides the legal basis for ownership of the establishment. The following are the types of legal organization:

• Single Proprietorship (LO=1) refers to a business establishment organized, owned, and managed by one person, who alone assumes the risk of the business enterprise.  A sole propietorship must apply for a business name and be registered with the Department of Trade and Industry (DTI). 

• Partnership (LO=2) 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. 

• Government Corporation (LO=3) also called Government-Owned or Controlled Corporation (GOCC) refers to a corporation organized for private aim, benefit or purpose with the government as the major stockholder, regardless of whatever they are stock or non-stock corporations. 

• Stock Corporation (LO=4) refers to 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.

• Non Stock, Non-profit Corporation (LO=5) refers to a business corporation which does not issue stock to its members and are 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.

• Cooperative (LO=6) refers to an organization composed primarily of small producers and/or consumers who voluntarily join together to form a business enterprise which they themselves own, control and patronize.

• Others (LO=7) refer to an organization not classified in any of the above classification. It includes private associations, foundations, Non-Governmental Organizations, or other forms of legal organizations.

Industrial Classification.  The Industrial Classification of an economic unit is determined by the activity from which it derives its major income or revenue. The 2009 PSIC which was approved for adoption by government agencies and instrumentalities through NSCB Resolution No. 2 Series 2010 was utilized to classify economic units according to their economic activities.

Size (SZ) of the Unit of Enumeration.  The size of an economic unit is determined by its total employment (TE) as of specific date. Total employment (TE) refers to the total number of persons who work in or for the establishment/enterprise. This includes paid employees, working owners, unpaid workers and all employees who work full-time or part-time including seasonal workers. Included also are persons on short term leave such as those on sick, vacation or annual leaves and on strike.

The following are the size codes and corresponding total employment used in the 2012CPBI: 

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

Geographic Classification.  Establishments are also classified by geographic area using the Philippine Standard Geographic Code (PSGC) classification. The PSGC contains the latest updates on the official number of regions, provinces, cities, municipalities, and barangays in the Philippines. The latest PSGC as of September 30, 2012 was used for the 2012 CPBI.

 

Sampling Design

Selection of sample establishment for the 2012 CPBI was done using stratified systematic sampling with 3-digit or 5-digit PSIC serving as industry strata and employment size as the second stratification variable.

 

Response Rate

Field operations of the 2012 CPBI were scheduled from April to July 2013. As of July 2013, only 61.2 percent of the total sample questionnaires were received at the Central Office. About 90.2 percent collection of questionnaires was achieved only on November 2013.

Total response rate for Financial Insurance Activities sector was 95.2 percent (1,768 out of 1,858 establishments).  This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, 26 establishments responded online and none accomplished e-questionnaire.  Others convert accomplished questionaires to portable document format (PDF) and submit through e-mail.  

 

CONCEPTS AND DEFINITIONS OF TERMS

 

Economic activity is the establishment’s source of income. If the establishment is engaged in several activities, its main economic activity is that which earns the biggest income or revenue.

Total employment is the number of persons who worked in for the establishment as of November 15, 2012.

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, receiving pure commissions only, and workers on indefinite leave.

Compensation includes salaries and wages, separation/retirement/terminal pay, gratuities, and payments made by the employer in behalf of the employees such as contribution to SSS/GSIS, ECC, PhilHealth, Pag-ibig, etc.

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.

Income or Revenue refers to cash received and receivables for goods/products and by-products sold and services rendered.

Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchaser prices including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.

Expenses refers to cost incurred by the establishment during the year whether paid or payable. This is treated on a consumed basis.

Intermediate cost refers to expenses incurred in the production of goods such as materials and supplies purchased, fuels purchased, electricity purchased, and agricultural/forestry/fishery and industrial services done by others plus beginning inventory of materials, supplies and fuels less ending inventory of materials, supplies and fuels.

Value added This is gross output less intermediate cost. Gross output for the financial and insurance activities is value of output plus non-industrial services done for others (except rent income from land). Intermediate input is intermediate cost plus non-industrial services done by others (except rent expense for land) and other costs.

Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.

Change in inventories is equivalent to the value of inventories at the end of the year less the value of inventories at the beginning of the year.

Inventories refer to the stock of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation is at current replacement cost in purchaser prices. Replacement cost is the cost of an item in terms of its present price rather than its original cost.

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

 

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Source:   Philippine Statistics Authority - National Statistics Office
               Manila, Philippines