2014 Annual Survey of Philippine Business and Industry (ASPBI) - Financial and Insurance Activities : Final Results

Reference Number: 

2017-108

Release Date: 

Tuesday, May 2, 2017

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

Final results of the 2014 Annual Survey of Philippine Business and Industry showed that a total of 7,303 establishments in the formal sector of the economy were engaged in financial and insurance activities.

Other financial service activities, except insurance and pension funding comprised 5,372 (73.6 %) of the total number of establishments.  This was followed by establishments engaged in monetary intermediation with 696 (9.5 %).  Ranked third were the combined activities auxiliary to insurance and pension funding and fund management activities establishments with 395 (5.4%).

 

Establishments with TE of 20 and over contributed 1,068 or 14.6 percent to the total number of establishments while establishments with TE of less than 20 comprised 6,235 (85.4%) establishments.

Monetary intermediation industry utilizes the highest number of workers

The sector employed a total of 302,792 workers in 2014. Of the total, almost all (97.3%) were paid employees and the rest were working owners or unpaid workers.

Monetary intermediation, despite ranking second in number of establishments, employed almost half of the total number of workers (147 thousand or 48.7%).  Other financial service activities, except insurance and pension funding activities, followed with 107,896 employees (35.6%).  Ranked third was insurance with 18,894 employees or 6.2 percent.

 

Establishments with TE of 20 and over employed 239,184 workers or about 79.0 percent of the total employed by the sector.  On the other hand, establishments with TE of less than 20 hired 63,609 workers or 21.0 percent.

Workers in activities of holding companies are the highest-paid employees

The sector paid in 2014 a total compensation of PHP148.3 billion, equivalent to an average annual compensation of PHP503.3 thousand per employee.

Industry wise, monetary intermediation paid the highest compensation of PHP89.3 billion comprising more than half (60.2%) of the total.  Other financial service activities, except insurance and pension funding activities placed a far second with PHP25.2 billion or 17.0 percent.  Insurance activities came in next with PHP13.9 billion or 9.4 percent. On the other hand, pension funding industry recorded the lowest amount of PHP143.8 million (0.1%).

Establishments with TE of 20 and over disbursed PHP131.4 billion or 88.6 percent of the total compensation for the sector while establishments with TE of less than 20 paid a total PHP16.9 billion or 11.4 percentage

Workers of activities of holding companies were the highest-paid employees receiving an average annual compensation of PHP1.2 million surpassing the sector’s average of PHP503.3 thousand per annum.  Employees of trusts, funds and other financial vehicles, was second with PHP917.0 thousand.  Workers in insurance were in third place with PHP734.5 thousand. However, those employed in other financial service activities, except insurance and pension funding activities, were paid only PHP250.1 thousand per annum.

 

Monetary intermediation activities share the biggest in income and expense

Gross income realized by the sector reached PHP1.2 thrillion in 2014.  Monetary intermediation had the biggest share with PHP494.3 billion or 39.8 percent of the total. Insurance followed with PHP237.5 billion (19.1%).  Activities of holding companies ranked third with PHP231.9 billion (18.7%).

Total expense incurred amounted to PHP838.0 billion in 2014.  Being the major contributors in income, monetary intermediation and insurance also had the largest proportion in expense with PHP359.8 billion (42.9%) and PHP209.7 billion (25.0%), respectively.  However, pension funding activities incurred the lowest expense of PHP797.7 million (0.1%).  Figure 4 shows the top five industry groups in income and expense.

 

Establishments with TE of 20 and over achieved an income of PHP1,079.8 billion or 87.0 percent and disbursed PHP 763.3 billion or 91.1 percent.  Establishments with TE of less than 20 realized an income of PHP161.3 billion or 13.0 percent and incurred expense of PHP74.7 billion or 8.9 percent.

Value added measures to PHP532.5 billion

Value added realized by financial and insurance sector totaled PHP532.5 billion in 2014.

Industry-wise, monetary intermediation registered the highest value added, of PHP235.4 billion (44.2%).  Activities of holding companies ranked far second with PHP164.7 billion (30.9%) and other financial service activities, except insurance and pension funding activities ranked third with PHP74.3 billion (13.9%).  On the other hand, pension funding recorded the least with PHP96.4 million (0.02%) (See Figure 5).

Establishments with TE of 20 and over contributed PHP 448.2 billion or 84.2 percent while establishments with TE of less than 20 shared in PHP 84.2 billion or 15.8 percent.

 

Activities of holding companies has the highest labor productivity

Value added per employee, a measure of labor productivity, was estimated at PHP1.7 million in 2014.  Activities of holding companies led the sector with PHP28.1 million while pension funding, the lowest with PHP 352.1 thousand per employee.

Income per peso expense stands at 1.48 for 2014

Income per peso expense stood at 1.48 in 2014. Trust, funds and other financial vehicles and activities of holding companies surpassed the national average for the sector which reported 4.09 and 3.05 income per peso expense, respectively.  Pension funding came in third with 1.54. Monetary intermediation and other financial service activities, except insurance and pension funding activities recorded an income per peso expense of 1.37 and 1.32, respectively.

Gross additions to fixed assets reach to PHP23.9 billion

Gross additions to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP23.9 billion in 2014.

Monetary intermediation activities acquired the biggest gross additions to fixed assets with PHP13.0 billion or 54.4 percent.  This was followed by activities of holding companies and other financial service activities, except insurance and pension funding activities with PHP3.6 billion and PHP 3.5 billion, respectively.

Establishments with TE of 20 and over acquired PHP 19.3 billion or 81.1 percent.  Establishments of TE of less than 20 contributed PHP 4.5 billion or 18.9 percent.

Total change in inventories measures to PHP18.4 billion

Total change in inventories (ending less beginning inventory) amounted to PHP18.4 billion in 2014.  Activities of holding companies had the highest change in inventory with PHP17.1 billion or 93.0 percent of the total.  Other financial service activities, except insurance and pension funding activities far followed with PHP1.2 billion or 6.3 percent.  On the other hand, insurance reported the least with negative PHP53.9 million, change in inventories.

Establishments with TE of 20 and over recorded change in inventories of PHP17.3 billion or 94.2 percent.  Establishments with TE of less than 20 reported PHP1.1 billion or 5.8 percent change in inventories.

Total subsidies received from the government amounts to PHP6.3 billion

Total subsidies received by the sector from the government amounted to PHP6.3 billion in 2014.

Only four industry groups received subsidies from the government.  Combined activities auxiliary to insurance and pension funding and fund management bagged the biggest subsidy of PHP4.1 billion or 66.1 percent. This was followed by insurance with PHP1.3 billion or 21.4 percent.  Other financial service activities, except insurance and pension funding activities was granted a share of PHP767.9 million or 12.2 percent.  Activities of holding companies received the least with PHP16.1 million or 0.3 percent.

Establishments with TE of 20 and over received PHP6.0 in subsidies and for establishments with TE of less than 20 acquired only PHP258.2 thousand in subsidies

Sales from e-commerce reaches PHP2.8 billion

Sales from e-commerce of the sector reached PHP2.8 billion in 2014.

Only four industry groups had e-commerce sales.  Monetary intermediation led the sector with e-commerce sales amounting to PHP2.0 billion or 70.2 percent of the sector’s total.

Trusts, funds and other financial vehicles recorded PHP717.1 million or 25.8 percent.  Other financial service activities, except insurance and pension funding activities, was third with PHP56.2 million or 2.0 percent.  Almost the same amount was reported by insurance activities with PHP54.8 million or 2.0 percent of the sector’s total.

Only establishments with TE of 20 and over reported e-commerce sales.

 


 

TECHNICAL NOTES

 

Introduction

This Special Release presents the final results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI) for the Financial and Insurance Activities sector for all establishments in the formal sector of the economy.

The 2014 ASPBI is one of the designated statistical activities of the 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 year 2014.  It will also serve as benchmark information in the measurement and comparison of national and regional economic growth.

The survey was conducted nationwide in April 2015 with the year 2014 as the reference period of data, except for employment which is as of November 15, 2014.

Data are presented at the national, regional and industry group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC). 

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 email.

Legal Authority

The conduct of the 2014 ASPBI is authorized under Republic Act 10625 known as the Philippine Statistical Act of 2013 - Reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.

Scope and Coverage

The 2014 ASPBI is 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

Hence, the 2014 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 2014 LE shows that there are about 944,500 establishments in operation in the country for the year.  About 266,000 establishments (28% of the total establishments) belong to the Formal Sector of which 231,000 (87%) comprise the establishment frame.

Listed below are the 18 economic sectors within the scope of the 2014 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 Work Activities (Q)
  • Arts, Entertainment and Recreation (R)
  • Other Service Activities (S)

Sampling Design

Unit of Enumeration

The unit of enumeration for the 2014 ASPBI is 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) refers to the organizational structure or role of the establishment in the organization.  

Legal Organization (LO) refers to the legal form of the economic entity that provides the legal basis for ownership of the establishment. 

Industrial Classification 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 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. 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.

Geographic Classification is grouping of establishments 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 PSGC as of December 31, 2014 was used for the 2014 ASPBI.

Sampling Design

Selection of sample establishment for the 2014 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.

Estimation Procedure

For Establishments with TE of Less Than 20

a. Non-Certainty Stratum

    The estimate of the total of a characteristic  for the non-certainty employment stratum TE less than 20 in the sth industry domain was

 

where:

  •    = denotes the non-certainty employment strata in TE of less than 20
  •  Xsj = value of the jth establishment in non-certainty employment stratum in TE of less than 20 in Sth industry domain
  •       =  1,2,3..., ns establishments
  •  Wsj = weight of the jth establishment in the non-certainty employment stratum of less than 20 in the sth industry domain

 

  •  Ns  = total number of establishments in the non-certainty employment stratum in TE of less than 20 in the sth industry domain
  •  ns  = number of sample establishments in the non-certainty employment stratum in TE of less than 20 in sth domain

b. Certainty Stratum

    The total of a characteristic  for the certainty employment stratum in the Cth industry domain was

where:

  •    = denotes the certainty employment strata in TE of less than 20 in the cth industry
  •  xcj = value of the jth establishment in the certainty employment strata in TE of less than 20 in the cth industry domain
  •  j      = 1,2,3,..., mc establishments 
  •  mc  = number of establishments in the certainty employment strata in TE of less than 20 in the cth industry domain

 

c. Total Estimate for TE of Less Than 20

    For all sections except B and C, national level estimates of the total of a characteristic  for the industry domain was obtain by                  aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,

 

     where  d  denotes the industry domain.

For Establishments with TE of 20 and Over

a.   Non-Certainty Stratum (strata of TE 20 to 49 and TE 50 to 99 for Sections G, H, I, J, K, L, M, N, P, Q, R and S.  

      The estimate of the total of a characteristic for the non-certainty employment strata in TE of 20 and over for selected industry                    domain in each region was as

where:

  •  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
  •  Wspj = weight of the jth establishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region

 

  •  Nsp  = total number of establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
  •  nsp  = number of sample establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region

b.   Certainty Stratum  

      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

where:

  •  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
  •      = 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

 

c.   Total Estimate for TE of 20 and 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 

where   dp  denotes the industry domains 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.

Weight Adjustment Factor for Non-Response

To account for non-response in the non-certainty strata, the adjustment factor (n/n’) was multiplied with the sampling weight (W) of each of the sampling unit. The sampling weight, defined as N/n, was recomputed as

 

Thus, the adjusted weight (W’sj) for employment stratum in TE 1-9 or TE 10-19 was

where:

  •  Ns   = total number of establisments in the employment stratum in TE 1-9 or TE 10-19 in the sth industry domain
  •  n's   = number of responding establishments in the employment stratum in TE 1-9 or TE 10-19 in the sth industry domain

For the non-certainty employment stratum for the selected industry domain with TE 20-99, the adjusted weight (W'spj) was

where:

  •  Nsp  = total number of establisments in the non-certainty employment stratum with TE 20-99 for the selected industry domain within each geographic domain (region)
  •  n'sp  = number of responding establishments in the non-certainty employment stratum with TE 20-99 for the selected industry domain within each geographic domain (region)

Questionaire Design

The questionnaire design is basically the same as that of the 2012 Census of Philippine Business and Industry. However, changes were made in the disaggregation of data items for fixed assets in support to the requirements of the 2008 Systems of National Accounts with respect to the generation of fixed capital formation.

The sample establishments responded also to the survey through the use of Web-based version of the 2014 ASPBI questionnaires which was accomplished online at the PSA website. Likewise, an e-questionnaire was also downloaded and submitted thru e-mail.

Response Rate

Field operations of the 2014 ASPBI were scheduled from April to July 2015.

Total response rate for Financial and Insurance Activities sector was 87.49 percent (1,070 out of 1,223 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, forty four establishments responded online.

 

Concepts and Definitions of Terms

 

Establishment is an economic unit under a single ownership control, i.e., under a single entity, engaged in one or predominantly one kind of economic activity at a single fixed location.

Total Employment is the number of persons who worked in for the establishment as of November 15, 2014.

Paid employees are all full-time and part-time employees working in or for the establishment and receiving pay, as well as those working away from the establishment and paid by and under the control of the establishment.  Included also are all employees on sick or maternity leave, paid vacation or holiday and on strike.  Excluded are directors paid solely for their attendance at meetings, consultants, workers on indefinite leave, working owners who do not receive regular pay, home workers and workers receiving pure commissions only.

Unpaid workers are working owners who do not receive regular pay, apprentices and learners without regular pay and persons working for at least 1/3 of the working time normal to the establishment without regular pay.  Excluded are silent or inactive business partners.

Compensation is the sum of salaries and wages, separation, terminal pay and gratuities paid by the establishment to its employees and total employer’s 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 includes cash received and receivables for goods/products and by-products sold and services rendered.  Valuation is at producer prices (ex-establishment) net of discounts and allowances, including duties and taxes but excluding subsidies.

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.

Expense refers to cost incurred by the establishment during the year whether paid or payable.  This is treated on a consumed basis.  Valuation is at purchaser price 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.

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.

Value Added is gross output less intermediate input. Gross output for financial and insurance activities is equal to the sum of total revenue (less rent income, royalty income and franchise income), capital expenditures of fixed assets produced on own account, and change in inventory. Intermediate input equal to the sum of the following expense items: materials and supplies; fuels, lubricants, oils and greases; electricity and water; industrial services done by others; 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 expense; less change in inventory of materials and supplies; fuels, lubricants, oils and greases; and goods for resale; research and development expense; environmental protection expense; royal fee; franchise fee, payouts and other cost.

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

Change in total inventories is computed as the total of ending inventory less the total beginning inventory.

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.

E-Commerce refers to the selling of products or services over electronic systems such as the Internet Protocol-based networks and other computer networks, Electronic Data Interchange (EDI) network, or other on-line system.

  
 

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