Other financial service activities, except insurance and pension funding industry leads the sector
Preliminary results of the 2014 Annual Survey of Philippine Business and Industry showed that a total of 1,059 establishments with total employment of 20 and over in the formal sector of the economy were engaged in financial and insurance activities.
Other financial service activities, except insurance and pension funding comprised 465 (43.9 %) of the total number of establishments. This was followed by establishments engaged in monetary intermediation with 300 (28.3 %). Ranked third were establishments engaged in insurance activities with 100 (9.4%).
At the regional level NCR had the most number of establishments with 46.9 percent (497). CALABARZON and Central Luzon placed far second and third with 9.9 percent and 8.2 percent, respectively. Cordillera Administrative region had the least with only 10 establishments. (See Table 2)
Monetary intermediation industry employs the highest number of workers
The sector employed a total of 218,331 workers in 2014. Of the total, almost all (99.7%) were paid employees and the rest were working owners or unpaid workers.
Monetary intermediation, despite ranking second in number of establishments, employed more than half of the total number of workers (126.4 thousand or 57.9%). Other financial service activities, except insurance and pension funding activities, followed with 54,672 employees (25.0%). Ranked third was insurance with 17,697 employees or 8.1 percent.
Regionwise, NCR recorded the biggest share in employment comprising almost three fourths (73.4%) of the total workforce. CALABARZON placed far second with 5.5 percent (11,951) and Central Visayas third, with 3.1 percent (6,698). Cordillera Administrative Region registered the least with 824 employees.
Workers in activities of trusts, fund and other financial vehicles are the highest-paid employees
The sector paid in 2014 a total compensation of PHP117.5 billion, equivalent to an average annual compensation of PHP539.7 thousand per employee.
Industry wise, monetary intermediation paid the highest compensation of PHP75.1 billion comprising to almost two thirds (63.9%) of the total. Other financial service activities, except insurance and pension funding activities placed a far second with PHP15.1 billion or 12.8 percent. Insurance activities ranked third with PHP12.9 billion or 11.0 percent. On the other hand, pension funding industry recorded the lowest amount of PHP141.3 million (0.1%).
Among regions, NCR spent the biggest share in total compensation amounting to PHP103.7 billion (88.2%). Central Visayas and CALABARZON were in second and third place with PHP3.1 billion (2.6%) and PHP2.8 billion (2.4%), respectively.
Workers in trusts, fund and other financial vehicles were the highest-paid employees receiving an average annual compensation of PHP1.3 million per annum surpassing the sector’s average of PHP539.7 thousand per annum. Employees of holding companies and insurance, followed next with PHP1.1 million and PHP729.3 thousand, respectively. However, those employed in other financial service activities, except insurance and pension funding activities, were paid only PHP278.1 thousand per annum.
Employees working in the NCR received the highest average annual compensation of PHP647.8 thousand while those employed in Ilocos Region received the lowest with PHP137.1 thousand.
Monetary intermediation activities contribute the biggest share in income and expense
Gross income realized by the sector reached PHP994.2 billion in 2014. Monetary intermediation had the biggest share with PHP410.8 billion or 41.3 percent of the total. Insurance followed with PHP230.8 billion (23.2%). Activities of holding companies ranked third with PHP164.9 billion (16.6%).
Total expense incurred amounted to PHP699.0 billion in 2014. Being the major contributors in income, monetary intermediation and insurance also had the largest proportion in expense with PHP296.9 billion (42.5%) and PHP203.4 billion (29.1%), respectively. However, pension funding activities incurred the lowest expense of PHP792.8 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 PHP908.3 billion or 91.4 percent in income and PHP654.5 billion or 93.6 percent in expense. Central Visayas and CALABARZON accounted for 4.6 percent and 1.0 percent, respectively in income. The same regions accounted for 1.7 percent and 1.1 percent in expense.
Value added amounts to PHP392.3 billion
Value added realized by financial and insurance sector totaled PHP392.3 billion in 2014.
Industry-wise, monetary intermediation registered the highest value added with PHP193.1 billion (49.2%). Activities of holding companies ranked far second with PHP116.1 billion (29.6%) and other financial service activities, except insurance and pension funding activities ranked third with PHP54.4 billion (13.9%). On the other hand, pension funding recorded the least with PHP95.4 million (0.02%) (See Figure 5).
Across regions, NCR reported the highest value added, amounting to PHP333.5 billion. Central Visayas and CALABARZON came in second and third with PHP38.6 billion (9.8%) and PHP4.7 billion (1.2%), respectively. Ilocos Region had the least value added with only PHP409.6 million.
Activities of holding companies has the highest labor productivity
Value added per employee, a measure of labor productivity, was estimated at PHP1.8 million in 2014. Activities of holding companies led the sector with PHP24.5 million while combined activities auxiliary to insurance and pension funding and fund management, the lowest with PHP127.8 thousand.
At the regional level, highest labor productivity was reported in Central Visayas with PHP5.8 million. NCR followed with labor productivity amounting to PHP2.1 million. Ranked third was Davao Region which recorded PHP608.0 thousand.
Income per peso expense stands at 1.42 for 2014
Income per peso expense stood at 1.42 in 2014. Holding companies surpassed the national average for the sector which reported 3.04 income per peso expense. Trust, funds and other financial vehicles was the second highest with 2.15. Pension funding came in third with 1.55. Monetary intermediation and other financial service activities, except insurance and pension funding activities recorded an income per peso expense of 1.38 and 1.36, respectively.
Gross additions to fixed assets reaches PHP17.3 billion
Gross additions to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP17.3 billion in 2014.
Monetary intermediation activities acquired the biggest gross additions to fixed assets with PHP10.7 billion. This was followed by other financial service activities, except insurance and pension funding activities and activities of holding companies with PHP2.7 billion and PHP1.9 billion, respectively.
NCR reported the highest gross additions to fixed assets comprising 88.3 percent or PHP15.3 billion. All regions acquired assets during the period.
Total change in inventories amounts to PHP17.3 billion
Total change in inventories (ending less beginning inventory) amounted to PHP17.3 billion in 2014. Activities of holding companies had the highest change in inventory with PHP16.3 billion or 94.5 percent of the total. Other financial service activities, except insurance and pension funding activities followed with PHP871.1 million. On the other hand, pension funding reported the least with PHP191.0 thousand change in inventories.
Regionwise, NCR reported the highest change in inventories amounting to PHP16.5 billion or 95.7 percent of the total. Central Visayas placed far second with PHP558.3 or 3.2 percent of the total. Ranked third was Cagayan Valley with PHP75.6 million or 0.4 percent of the total.
Total subsidies received from the government amounts to PHP6.0 billion
Total subsidies received by the sector from the government amounted to PHP6.0 billion in 2014.
Only three industry groups received subsidies from the government. Combined activities auxiliary to insurance and pension funding and fund management got the biggest subsidy of PHP4.1 billion. This was followed by insurance with PHP1.3 billion. Other financial service activities, except insurance and pension funding activities was granted a share of PHP525.7 million or 8.8 percent.
At the regional level, only four of the regions reported subsidies received from the government. NCR received the highest subsidy of PHP6.0 billion. Ranked a far second was CARAGA combined with ARMM with PHP4.8 million (0.08%). Northern Mindanao came in third place with subsidies of PHP500.0 thousand or .01 percent of the total subsidies received by the sector.
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.
Almost all of the e-commerce transactions were in NCR, accounting for 99.0 percent (PHP2.7 billion) of the total. Western Visayas came in far second with PHP14.5 million or 0.5 percent and on the third place was Cagayan Valley accounting for PHP12.0 million or 0.4 percent.
This Special Release presents the preliminary results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI) for the Financial and Insurance Activities sector for establishments with total employment of 20 and over 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 e-mail.
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:
- Corporations and partnerships
- Cooperatives and foundations
- Single establishment with employment of 10 or more
- 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)
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.
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.
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 an industry domain in each region
s = denotes the non-certainty employment strata in TE of 20 and over
p = 1,2,...17 regions (geographic domains)
Xspj = value of the jthestablishment in the non-certainty employment strata in TE of 20 and over in for an industry domain in each regionin each region
j = 1,2,3,..., nsp establishments
Wspj = weight of the jth establishment in 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
c = denotes the certainty employment strata in TE of 20 and over
p = 1,2,...17 regions (geographic domains)
Xcpj = value of the jthestablishment in the non-certainty employment strata in TE of 20 and over in for an industry domain in each region
j = 1,2,3,..., mcp establishments
mcp = number of establishments in the certainty employment strata in TE of 20 and over in an industry domain within 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 region (geopraphic domain) was obtained by aggregating the estimated for all employment strata (non-certainty and certainty) in the same industry domain,
where dp denotes the industry domains in each region
National level estimate of the the characteristic by industry domain were obtained by aggregating separately the estimates 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
Thus, the adjusted weight (W'sj) for employment stratum in TE 1-9 or TE 10-19 was
Ns = total number of establishments in 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 Sth industry domain
For the non-certainty employment stratum for the selected industry domain with TE of 20-99, the adjusted weight (W'spj) was
Nsp = total number of establishments 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 of 20-99 for the selected industry domain within each geographic domain (region)
Field operations of the 2014 ASPBI were scheduled from April to July 2015.
Total response rate for Financial and Insurance Activities sector with TE of 20 and over was 88.3 percent (679 out of 769 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, 30 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 input rrefers 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 the sum of the total income (less rent income from land, 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; industrial services done by others; non-industrial services done by others; goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee and other expenses.
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.
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.