Other financial service activities, except insurance and pension funding industry leads the sector
Preliminary results of the 2013 Annual Survey of Philippine Business and Industry showed that a total of 1,029 establishments with total employment of 20 and over were engaged in Financial and insurance activities.
Other financial service activities, except insurance and pension funding comprised 449 (43.6 %) of the total number of establishments. This was followed by establishments engaged in monetary intermediation with 303 (29.4 %). Ranked third are establishments engaged in insurance activities with 97 (9.4%). (See Figure 1)
Majority of establishments are in the National Capital Region (NCR)
At the regional level, the NCR had the most number of establishments with 46.9 percent (483). CALABARZON and Central Luzon placed far second and third with 9.9 percent and 8.0 percent, respectively. MIMAROPA region had the least with only 11 establishments. (See Table 2)
Monetary intermediation activities industry employs the highest number of workers
The sector employed a total of 226,029 workers in 2013. Of the total, almost all (99.6%) were paid employees and the rest were working owners or unpaid workers.
Monetary intermediation activities, despite ranking second in number of establishments employed more than half of the number of workers 133.3 thousand (58.2 percent). Other financial service activities, except insurance and pension funding activities followed with 58,386 employees (25.5%). Ranked third is insurance activities with 16,008 employees or 6.9 percent. (See Fig. 2)
Region wise, the NCR recorded the biggest share in employment comprising more than three fourths (76.0 %) of the total workforce. CALABARZON placed far second with 4.7 percent (10,683) and Western Visayas third, with 3.0 percent (6,735). CAR registered the least with 792 employees.
Workers in activities of holding companies are the highest-paid employees
The sector paid in 2013 a total compensation of PHP118.1 billion, equivalent to an average annual compensation of PHP524.9 thousand per paid employee.
Industry wise, monetary intermediation paid the highest compensation of PHP82.0 billion comprising more than two thirds (69.5%) of the total. Other financial service activities, except insurance and pension activities placed far second with PHP14.4 billion or 12.2 percent. Insurance activities ranked third with PHP10.7 billion or 9.1 percent. On the other hand, pension funding recorded the lowest amount of PHP104.9 million (0.1%).
Among regions, the NCR spent the biggest share in total compensation amounting to PHP106.8 billion (90.5%). CALABARZON and Central Visayas were in second and third place with PHP2.2 billion (1.9%) and PHP2.1 billion (1.7%), respectively.
Workers in activities of companies were the highest-paid employees receiving an average annual compensation of PHP936.5 thousand per annum surpassing the sector’s average of PHP524.4 thousand per annum. Employees of trusts, funds and other financial vehicles and insurance followed next with PHP804.4 thousand and PHP660.4 thousand, respectively. However, those employed in other financial service activities, except insurance and pension funding activities were paid only PHP264.8 thousand.
Employees working in the National Capital Region received the highest average annual compensation of PHP623.2 thousand while those employed in Western Visayas received the lowest with PHP133.7 thousand.
Monetary intermediation activities contribute the biggest share in income and expense
Gross income realized by the sector reached PHP1.1 trillion in 2013. Monetary intermediation activities had the biggest share with PHP549.6 billion or 51.7 percent of the total. Insurance activities ranked second with PHP191.8 billion (18.0%). Other financial service activities, except insurance and pension funding ranked third with PHP114.5 billion (10.8%).
Total expenses incurred amounted to PHP731.9 billion in 2013. Being the major contributors in income, monetary intermediation activities and insurance activities also had the largest proportion in expense with PHP386.7 billion (52.8%) and PHP166.5 billion (22.8%), respectively. However, pension funding activities incurred the lowest cost of PHP677.6 million (0.1%). Figure 4 shows the top five industry groups in income and expense.
At the regional level, NCR had the biggest share in income and expense. It shared PHP986.7 billion or 92.8 percent in income and PHP692.2 or 94.6 percent in expense. Central Visayas and CALABARZON accounted for 3.8 percent and 0.8 percent, respectively in income. The same regions accounted for 1.4 percent and 0.9 percent in expense.
Value added amounts to approximately PHP441.1 billion
Value added realized by Financial and Insurance sector totaled PHP441.1 billion in 2013.
Industry wise, monetary intermediation activities registered the highest value added with PHP243.5 billion (54.9%). Activities of holding companies ranked far second with PHP74.1 billion (16.7%) and other financial service activities, except insurance and pension funding ranked third with PHP63.2 billion (14.3%). On the other hand, pension funding recorded the least with PHP92.1 million (0.02%). (See Fig. 5)
Across regions, NCR reported the highest value added, amounting to PHP389.6 billion. Central Visayas and CALABARZON came in second and third with PHP33.2 billion (7.5%) and PHP3.9 billion (0.9%), respectively. Ilocos region had the least value added with only PHP328.2 million.
Activities of holding companies has the highest labor productivity
Value added per employee, a measure of labor productivity, was estimated at PHP2.0 million. Activities of holding companies led the sector with PHP18.5 million while pension funding, the lowest with PHP465.4 thousand.
At the regional level, highest labor productivity was reported in Central Visayas with PHP5.3 million. Ranked second was NCR with labor productivity amounting to PHP2.3 million. Ranked third is Cagayan Valley which recorded PHP554.6 thousand.
Gross addition to fixed assets reaches PHP72.8 million
Gross addition to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP72.8 million in 2013.
Monetary intermediation activities acquired the biggest gross addition to fixed assets with PHP69.1million. This was followed by other financial service activities, except insurance and pension funding activities and insurance with PHP3.7 million and PHP30.0 thousand, respectively.
NCR reported the highest gross additions to fixed assets comprising 92.9 percent or PHP67.6 million. Only five regions acquired assets during the period. These are NCR, Davao Region, Ilocos Region, Cagayan Valley and Western Visayas.
Total change in inventories amounts to PHP18.1 billion
Total change in inventories (ending less beginning inventory) amounted to PHP18.1 billion in 2013. Insurance activities had the highest change in inventory with PHP8.5 billion or 47.3 percent of the total. Monetary intermediation followed with PHP5.9 billion. On the other hand, pension funding reported the least with 139.0 thousand change in inventories.
Regionwise, NCR reported the highest change in inventories amounting to PHP17.5 billion or 97.1 percent of the total. Western Visayas placed far second with PHP146.6 million or 0.8 percent of the total. Ranked third is Davao Region with PHP70.7 million or 0.4 percent of the total.
Total subsidies received from the government amounts to PHP6.4 billion
Total subsidies received from the government amounted to PHP6.4 billion in 2013.
Only four industry groups received subsidies from the government. Activities auxiliary to insurance and pension funding and fund management got the biggest subsidy with PHP3.4 billion. This was followed by insurance with PHP1.3 billion and other financial service activities, except insurance and pension funding activities with PHP1.0 billion. The last to have received subsidy was monetary intermediation with PHP616.3 million.
At the regional level, only seven of the regions reported subsidies received from the government. NCR received the highest subsidy of PHP5.8 billion. Ranked far second and third were Cagayan Valley with PHP616.3 million (9.7%) and Caraga with PHP3.0 million or 0.05 percent of the total.
Sales form e-commerce reaches PHP7.6 billion
Sales from e-commerce of the sector reached PHP7.6 billion in 2013.
Only five industry groups had e-commerce sales. Monetary intermediation led the sector with e-commerce sales amounting to PHP6.3 billion or 82.6 percent of the sector’s total. Other financial service activities, except insurance and pension funding activities was second with PHP701.4 million. Activities auxiliary to financial service, except insurance and pension funding activities came in third with e-commerce sales of PHP473.7 million. Insurance had the least e-commerce sales with only PHP9.0 million.
Almost all of the e-commerce transactions were in NCR,for 94.9 percent (PHP7.2 billion) of the total. Central Visayas came in far second with PHP153.0 million or 2.0 percent of the total. On the third place is Davao Region accounting for 1.1 percent of the total or PHP85.4 million.
This Special Release presents the preliminary results of the 2013 Annual Survey of Philippine Business and Industry (ASPBI) for the Financial and Insurance Activities sector for establishments with total employment of 20 and over.
The 2013 ASPBI is a forerunner of the 2010 ASPBI and one of the designated statistical activities of the former National Statistics Office (NSO) now Philippine Statistics Authority (PSA). Data collected from the survey will provide information on the levels, structure, performance and trends of economic activities of the formal sector of the economy for the reference period 2013. It will also serve as benchmark information in the measurement and comparison of national and regional economic growth.
To provide establishment respondents ease of accomplishing the 2013 ASPBI questionnaires, the income and expense account in the Financial Statement of establishment was adopted in the design of sectoral 2013 ASPBI questionnaires. 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 PSA website and downloading of e-questionnaire and submission thru e-mail.
The conduct of the ASPBI is governed by authority of the following legislative acts and presidential directives:
- Republic Act 10625 know as the Philippine Statistical Act of 2013 dated September 12, 2013 - (Reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities). It shall be the policy of the State to effect the necessary and proper changes in the organizational and functional structures of the PSS in order to rationalize and promote efficiency and effectiveness in the delivery of statistical services.
Section 27 of Republic Act No 10625 states that:
"... Respondents of primary data collection activities such as censuses and sample surveys are obliged to give truthful and complete answers to statistical inquiries. The gathering, consolidation and analysis of such data shall likewise be done in the most truthful and credible manner. Any violation of this Act shall result in the imposition of the penalty of one (1) yearimprisonment and a fine of One hundred thousand pesos (P100,000.00). In cases where the respondent fails to give truthfulcomplete answers to such statistical inquiries is a corporation, the above penalty shall be imposed against, such corporation, enterprise or business concerned, shall be imposed a fine ranging from One hundred thousand pesos (P100,000.00) to Five hundred thousand pesos (P500,000.00)..."
Confidenciality of Information
- Republic Act 10625 (Philippine Statistical Act of 2013)
Section 27 of RA 10625 states that:
"... Any person, including parties within the PSA Board and the PSA, who breach the confidentiality of information, whether by carelessness, improper behavior, behavior with malicious intent, and use of confidential information for profit, are considered guilty of an offense and shall be liable to fines as prescribed by the PSA Board which shall not be less than Five thousend pesos (P5,000.00) nor more than Ten thousand pesos (P10,000,00.00) and/or imprisonment of three (3) months but not exceed one (1) year,
- Republic Act 6713 (Code of Conduct and Ethical Standards for Public Officials and employees dated February 20, 1989)
Section 7 of RA 6713 states that:
"... (c) Disclosure and/or misuse of confidential informatiom. Public officials and employees shall not use or divulge confidential or classified information officially known to them by reason of their office and not made available to the public, either: (1) to further their private interest, or give undue advantage of anyone, or (2) to prejudice the public interest..."
Scope and Coverage
The 2013 ASPBI 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:
- Corporations and partnerships
- Cooperatives and foundations
- Single establishment with employment of 10 or more
- Single proprietorship with branches
Hence, the 2013 ASPBI covered only the following economic units:
- 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 Classification (PSIC).
The initial estimate of the 2013 List of Establishments (LE), the frame used to draw the sample establishments for the 2013 ASPBI, registered a total of 941,000 establishments in operation nationwide in 2013. Out of this number, 72 percent or 678,000 establishments belong to the informal sector and only 28 percent or 263,000 establishments made up the formal sector.
Listed below are the 18 economic sectors within the scope of the 2013 ASPBI classified under the 2009 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 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)
Unit of Enumeration
The unit of enumeration for the 2013 ASPBI 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 organizations (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 only (EO=2) is an establishment which has a separate main office located elsewhere.
- Establishment and Main Office (EO=3) is one where the establishment 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). (EO). 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 proprietorship 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 whether they are stock or non-stock corporations.
- Main Office (EO=4) is a unit which controls, supervises and directs one or more establishments of an enterprise.
- 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 2013 ASPBI:
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 December 31, 2013 was used for the 2013 ASPBI.
Selection of sample establishment for the 2013 ASPBI 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.
Non-Certainty Stratum (strata TE of 20-49 and TE of 50-99)
The estimate of the total of a characteristic ( Xsp ) for the non-certainty employment strata in TE of 20 and over for an industry domain in each region (geographic domain) is
- s = denotes the non-certainty employment strata in TE 20 and over
- p = 1,2,...,17 regions geographic domains
- xspj = value of the jth establishment in the certainty employment strata in TE of 20 and over for an industry domain in each region
- j = 1,2,3..., nsp establishments
- Wspi = weight of the jth establishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
- Nphs = total number of establishments in the sthnon-certainty employment strata in TE of 20 and over in hthindustry domain in the pthregion
- nphs = number of sample establishments in sthnon-certainty employment strata in TE of 20 and over for hthindustry domain in the pthregion.
The the total of a characteristic for the certainty employment stratum in TE of 20 and over in an industry domain in each region was
- c = denotes the non-certainty employment strata in TE of 20 and over
- p = 1,2,...17, regions (geographic domains)
- xcpj = value of the jth establishment in the certainty employment strata in TE of 20 and over in an industry domain within each region
- j = 1,2,3..., mcp establishment
- mcp = number of establishments in the certainty strata in TE of 20 and over in an industry domain in each region
Total Estimate for TE of 20 an Over
The estimate of the total of a characteristic for the industry domain in each (geographic domain) was obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry
- d = denotes the industry domain
- dp = denotes the industry domain in each region
National level estimates of the characteristics by industry domain were obtained by aggregating separately the estimates (Xdp) for the particular industry domain from all the regions.
- d = denotes the industry domain
- dp = denotes the industry domain in each region
National level estimate of the the characteristic by industry domain were obtained by aggregating separately the estimates (X ÃƒÅ’‚d) for the particular industry domain from all the regions.
Weight Adjusment Factor for Non-Response
To account for non-response in the non-certainty strata, the adjusment factors, and (n/n') was multipled with the sampling weight (W) of each of the sampling unit. The sampling weight which is defined as N/n was recomputed as
For the non-certainty employment stratum in TE of 20-49 or 50-99, the adjusted weight is
- W'spi = is the adjusted weight for non-certainty stratum
- Nsp = total number of establishments in the non-certainty employment stratum in TE of 20-49 or 50-99 fon an industry domain within each geographic domain (region)
- n'sp = number of responding establishments in the non-certainty employment stratum in TE of 20-49 or 50-99 for an industry domain within each geographic domain (region)
Total response rate for Financial and Insurance Activities sector with TE of 20 and over was 94.6 percent (721 out of 762 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, 40 establishment responded online and none accomplished e-questionnaire. Others convert accomplished questionnaires to portable document format (PDF) and submit through e-mail.
CONCEPTS AND DEFINITIONS OF TERMS
Total employment is the number of persons who worked in for the establishment as of November 15, 2013.
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.
Expense 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 industrial services done by others plus beginning inventory of materials, supplies and fuels less ending inventory of materials, supplies and fuels.
Valued added is gross output less intermediate input. Gross output for professional, scientific and technical 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 purchased, water purchased; cost of industrial services done by others; cost of non-industrial services done by others; goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee; payouts and other cost.
Value of output represents the sum of the receipts from products and by-products sold, services rendered, industrial services, and goods sold in the same condition as purchased less the cost of goods sold; and value of fixed assets produced on own account and change in inventories.
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.
Source: Philippine Statistics Authority - National Statistics Office