Top ten industries comprise more than half of manufacturing establishments with total employment of 20 and over

There are 6,653 manufacturing establishments with total employment (TE) of 20 and over, according to the preliminary results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI).

By industry group, the top ten industries in terms of number of establishments comprised more than half (53.7%) of the total manufacturing establishments with TE of 20 and over. Other food products registered the highest number of establishments with 822 establishments or 12.4 percent share of the total manufacturing establishments. Wearing apparel, except fur apparel, ranked second with 543 establishments (8.2%) while plastic products followed closely with 495 establishments (7.4%). Other industries in the top ten in terms of number of establishments in 2014 are the following:                     

• Printing and service activities related to printing (350 establishments, 5.3%)  
• Other fabricated metal products; metal working service activities (293 establishments, 4.4%)
• Furniture (283 establishments, 4.2%) 
• Paper and paper products (222 establishments, 3.3%)
• Non-metallic mineral products, n.e.c. (205 establishments, 3.1%)
• Other chemical products, n.e.c. (203 establishments, 3.0%)
• Structural metal products, tanks, reservoirs and steam generators (158 establishments, 2.4%)

By region, the top three regions accounted for almost three-fourths (73.9%) of the total or 4,914 establishments. These three regions are all located in Luzon as follows: National Capital Region (NCR) with the highest number of 2,477 establishments or 37.2 percent of the total, followed by CALABARZON with 1,623 establishments (24.4%) and Central Luzon with 814 establishments (12.2%). Among the regions in the Visayas area, Central Visayas registered 661 establishments or 9.9 percent of the total. While in Mindanao, Davao Region recorded 234 establishments with a share of 3.5 percent of the total. Figure 2 shows the number of establishments by region in 2014. 

Electronic components industry leads in terms of employment generation

Manufacturing establishments with TE of 20 and over reported 1,031,058 workers. Paid employees made up 99.6 percent of total employment while the rest were working owners and unpaid workers.

Industrywise, the top ten industries in terms of employment generation covered 594,037 workers or 57.6 percent of total employment. Electronic components industry employed the highest number of workers with 145,937 while wearing apparel, except fur apparel, posted the second highest number of workers with 93,993. Other food products followed with 87,277 workers. Computers and peripheral equipment and accessories; and parts and accessories for motor vehicles employed a total of 57,421 and 51,769 workers, respectively.

Other five industries comprising the top ten in terms of employment generation are:

·      Plastic products with 48,374 workers

·      Other fabricated metal products; metal working service activities with 31,595 workers

·      Processing and preserving of fruits and vegetables with 28,651 workers

·      Non-metallic mineral products, n.e.c with 26,243 workers

·      Paper and paper products with 22,777 workers  

Figure 3 shows the percent distribution of employment of manufacturing establishments with TE of 20 and over by industry group in 2014.

Among regions, the top three regions in terms of employment generation accounted for a total of 766,472 workers or 74.3 percent of the total workforce. CALABARZON, as the top ranking region generated the most number of workers employing 406,687 or 39.4 percent of the total. NCR placed second with 215,424 workers or 20.9 percent. Central Luzon followed with 144,361 workers or 14.0 percent of the total.

Manufacturing establishments spends PHP286.0 billion for total compensation

In 2014, manufacturing establishments with TE of 20 and over spent a total compensation of PHP286.0 billion. This translates to an average annual compensation of PHP278,372 per employee. 

Among industries, refined petroleum products paid the highest average annual compensation of PHP1.8 million per employee. Tobacco products, ranked second, with average annual compensation of PHP1.1 million.

The following table shows the industries with an average annual compensation per employee of more than half a million.

Table 1  Average Annual Compensation of Employees in Top-Paying Manufacturing Establishments

with TE of 20 and Over by  Industry Group: Philippines, 2014

Regionwise, the top three regions spent PHP226.9 billion for total compensation of employees which accounted for 79.3 percent of the total. CALABARZON spent the highest amount of PHP122.7 billion which translates to an average annual compensation of PHP119,464 per employee for the region. NCR and Central Luzon followed with total compensation of PHP71.0 billion and PHP33.2 billion, respectively. 

Value of output reaches PHP4.2 trillion, refined petroleum products industry generates the highest value of output

Manufacturing establishments with TE of 20 and over generated PHP4.2 trillion of value of output in 2014.

Among industry groups, the combined share of the top ten industries accounted for 55.7 percent of the total output of manufacturing establishments with TE of 20 and over. Refined petroleum products generated the highest value of output accounting for 12.1 percent of the total or PHP506.1 billion. Electronic components ranked next with 9.8 percent of the total or an output of PHP406.8 billion. Other food products and dairy products occupied the third and fourth slot, with 5.8 percent and 4.9 percent of the total, respectively.

Other industries in the top ten contributors to value of output are the following:

·      Beverages (4.4% or PHP182.2 billion)

·      Other chemical products, n.e.c. (4.1% or PHP172.2 billion)

·      Computers and peripheral equipment and accessories (4.0% or PHP167.2 billion)

·      Non-metallic mineral products, n.e.c. (3.8% or PHP156.7 billion)

·      Parts and accessories for motor vehicles (3.7% or PHP153.0 billion)

·      Motor vehicles (3.2% or PHP133.9 billion)

Regionwise, the combined share of the top three regions to total value of output reached 79.5 percent of the total or PHP3.3 trillion. These regions are the following: 

• CALABARZON, 41.1 percent (PHP1.7 trillion)
• NCR, 20.6 percent  (PHP861.4 billion)
• Central Luzon, 17.8 percent (PHP744.2 billion)

Electronic components industry leads the top contributors to value added

In 2014, value added for manufacturing establishments with TE of 20 and over was estimated at PHP1.1 trillion.

At the industry level, the industries in the top ten slots comprised more than half (68.3%) of the total value added amounting to PHP737.2 billion. Electronic components led the top contributors to value added with a share of 12.6 percent of the total. Motor vehicles and tobacco products, shared 8.1 percent each for the second slot. Beverages and non-metallic mineral products n.e.c. followed in the third and fourth place with 8.0 percent and 6.9 percent share of the total, respectively.

Completing the list of industries in the top ten slots are the following:

• Other food products, (5.8%)
• Dairy products (4.8%)
• Parts and accessories for motor vehicles (4.4%)
• Other chemical products, n.e.c. (3.9%)
• Refined Petroleum products (3.0%)
• Computers and peripheral equipment and accessories (2.6%)

By region, the top three regions generated PHP876.1 billion or 81.2 percent of the total value added of the manufacturing establishments with TE of 20 and over.  CALABARZON led the regions with PHP468.0 billion or 43.4 percent of the total. NCR ranked second with PHP263.6 billion or 24.4 percent while Central Luzon generated PHP144.5 billion or 13.4 percent.

The ratio of value added to total employment, a simple measure of labor productivity, was recorded at PHP1.0 million.

Table 2 shows the most labor productive manufacturing industries in 2014 that exceeded a total productivity of PHP1.0 million.

TABLE 2  Most Labor Productive Industries for Manufacturing Establishments with TE of 20 and Over

by Industry Group: Philippines, 2014

Electronic components industry contributes PHP33.3 billion worth of gross addition to tangible fixed assets

Gross addition to tangible fixed assets of manufacturing establishments with TE of 20 and over was estimated at PHP120.4 billion in 2014.  

At the industry group level, electronic components contributed the highest gross addition to tangible fixed assets at PHP33.3 billion or 27.6 percent of the total. Basic precious and other non-ferrous metals followed with PHP14.2 billion or 11.8 percent. Pharmaceuticals, medicinal chemical and botanical products ranked a far third with PHP6.6 billion or 5.5 percent of the total.

Regionwise, the top three regions comprised PHP86.3 billion or 71.7 percent of the total gross addition to tangible fixed assets. The bulk of the gross addition to tangible fixed assets was contributed by CALABARZON with PHP53.2 billion or 44.2 percent of the total. NCR ranked second with PHP19.0 billion or 15.8 percent. Central Luzon followed with PHP14.0 billion or 11.7 percent of the total.

Total subsidies received by manufacturing establishments with TE of 20 and over reaches PHP235.5 million

In 2014, total subsidies received by manufacturing establishments with TE of 20 and over reached PHP235.5 million.

Among the 15 industry groups that received subsidies in 2014, the top three industries received a total of PHP171.8 million or almost three-fourths (73.0%) of the total. Spinning, weaving and finishing of textiles led the industries with PHP83.9 million (35.6%). Followed by parts and accessories for motor vehicles with PHP61.4 million (26.1%). Ranking third was non-metallic mineral products, n.e.c. with PHP26.6 million (11.3%).

At the regional level, only seven regions received subsidies in 2014. Of this, the top three regions received PHP222.9 million or 94.7 percent of the total. These regions are:

• Central Luzon with PHP101.5 million (43.1%)
• NCR with PHP86.4 million (36.7%)
• Central Visayas with PHP35.0 million (14.9%)

Electronic components industry leads in terms of e-commerce sales, contributes 79.2 percent to total

E-commerce sales by manufacturing establishments with TE of 20 and over totaled PHP6.0 billion in 2014.

Industrywise, the top three industries contributed a combined share of 94.7 percent to total sales through e-commerce. Electronic components with more than three-fourths (79.2%) or PHP4.8 billion worth of e-commerce sales led the industries. Followed by processing and preserving of fish, crustaceans and mollusks with 10.2 percent share (PHP615.3 million). Ranking third was optical instruments and photographic equipment with 5.3 percent share (PHP319.1 million).  

By region, the top three regions generated a total of PHP5.9 billion worth of e-commerce sales or 97.0 percent of the total. CALABARZON accounted for the highest e-commerce sales with  PHP5.1 billion or 84.9 percent of the total. A far second was SOCCSKSARGEN with PHP615.3 million or 10.2 percent. NCR followed, with PHP119.8 million or 2.0 percent of the total sales through e-commerce. 

TECHNICAL NOTES

Introduction

This Special Release presents the preliminary results of the 2014 ASPBI for manufacturing establishments with TE of 20 and over.

The 2014 ASPBI is one of the designated statistical activities of the Philippine Statistics Authority (PSA). Data collected from the survey provides information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country.  The 2014 Survey of Tourism Establishments in the Philippines (STEP) was undertaken as a rider to this survey.

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

Like the 2013 ASPBI operations, the data processing for this survey was decentralized to the Provincial Statistical Services Offices (PSSOs) as the provinces are near the establishments which are the data source of the survey.

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

Legal Authority

The conduct of 2014 ASPBI is authorized under the following:

Republic Act 10625 known 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) year imprisonment and a fine of One hundred thousand pesos (P100,000.00). In cases where the respondent fails to give truthful and complete answers to such statistical inquiries is a corporation, the above penalty shall be imposed against the responsible officer, director, manager and/or agent of said corporation. In addition, such erring 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)...”

Scope and Coverage

The 2014 ASPBI covered establishments engaged in 18 economic sectors classified under the 2009 PSIC, namely:

o   Agriculture, Forestry and Fishing (A)

o   Mining and Quarrying (B)

o   Manufacturing (C)

o   Electricity, Gas, Steam, and Air Conditioning Supply (D)

o   Water Supply; Sewerage, Waste Management and Remediation Activities (E)

o   Construction (F)

o   Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (G)

o   Transportation and Storage (H)

o   Accommodation and Food Service Activities (I)

o   Information and Communication (J)

o   Financial and Insurance Activities (K)

o   Real Estate Activities (L)

o   Professional, Scientific and Technical Activities (M)

o   Administrative and Support Service Activities (N)

o   Education (P)

o   Human Health and Social Work Activities (Q)

o   Arts, Entertainment and Recreation (R)

o   Other Service Activities (S)

However, three (3) sectors of the 2009 PSIC are not covered. These are

o   Public Administration and Defense; Compulsory Social Security (O)

o   Activities of Households as Employers; Undifferentiated Goods and Services Producing Activities of Households for Own Use (T)

o   Activities of Extra-territorial Organization and Bodies (U)

The survey was confined to the formal sector of the economy, which consists of the following:

o   Corporations and partnership

o   Cooperatives and foundations

o   Single proprietorship with employment of 10 and over

o   Single proprietorships with branches

Hence, the 2014 ASPBI covered only the following economic units:

o   All establishments with total employment (TE) of 10 and over, and

o   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 PSIC.

Frame

The frame for the 2014 ASPBI was extracted from the 2014 List of Establishments (LE).

The 2014 LE is the combined result of the following:

1.    2014 field verification of NO MATCHED establishments conducted during the period from September to December 2014.  It covered  establishments from the following lists:

a.    List of operating registered enterprises as of September 2013 from the Philippine Economic Zone Authority (PEZA)

b.    Top 1000 Corporations from the 2012 Top 1000 Corporations of the Business World

c.     List of establishments engaged in Information and Communication Technology (ICT) and Business Process Management (BPM) as of May 2014 from Information, Communication and Telecommunication Office (ICTO)

d.    2014 Directory of the Philippine Retailers Association (PRA)

e.    2013 Traders (Importers/Exporters) list from the Foreign Trade Statistics Section of the Philippine Statistics Authority (PSA), coverage of which was limited to corporations 

f.      Directory of the country’s best hotels from the November 30, 2013 issue of the Philippine Daily Inquirer

g.    Reported subsidiaries, branches in the 2011 Survey of Enterprises (SEP), some branches and reporting units of sample establishments of 2012 Census of Philippine Business and Industry (CPBI)

2.    Survey feedbacks from the 2014 Quarterly Survey of Philippine Business and Industry (QSPBI) and 2014 Monthly Integrated Survey of Selected Industries (MISSI); list of branches and subsidiaries from the 2013 Annual Survey of Philippine Business and Industry and 2013 Survey on Information and Communication Technology (SICT); 2014 Q2 Labor Turn Over Survey of the former BLES

3.    Department of Tourism lists of accredited tourism establishments in 2014

The estimated number of establishments in the 2014 LE totaled 944,500 establishments in operation in the country in 2014. Of this, about 28.0 percent or 266,000 establishments belong to the formal sector of which 87.0 percent or 231,000 establishments comprised the establishment frame. This frame was used to draw the sample establishments for the survey.

Unit of Enumeration

Like all other establishments censuses/surveys conducted by the PSA, the 2014 ASPBI unit of enumeration is the establishment. The establishment is defined as an economic unit under a single ownership or control which engages in one or predominantly one kind of activity at a single fixed location.

For manufacturing, the unit of enumeration consists of shop, factory, bakery, mill, distillery, refinery, cannery, abattoir, brewery, foundry, printing press, tannery or plant engaged in manufacturing, processing, fabricating or finishing products mechanically or manually including the assembly of component parts of manufactured products and the substantial alteration, reconstruction or repair of special type of goods and classified under economic organization such as: single establishment (EO=1), branch only (EO=2) and establishment and main office (EO=3).

Classification of Establishments

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

Economic Organization relates to the organizational structure or role of the establishment in the organization.  An establishment may be single establishment, branch, establishment and main office with branches elsewhere, main office only, and ancillary unit other than main office.

Legal Organization refers to the legal form of the economic entity that owns the establishment.  This provides the legal basis for ownership.  An establishment may be single proprietorship; partnership; government corporation; stock corporation; non-stock, non-profit corporation; and cooperative.

Industrial classification of an economic unit was determined by the activity from which it derives its major income or revenue.  The 2009 PSIC was utilized to classify economic units according to their economic activities.

Size of an establishment is determined by its total employment (TE) as of a specific date. 

Geographic Classification refers to classification of establishments by geographic area using the Philippine Standard Geographic Code (PSGC) classification.

Methodology

Sampling Design

The 2014 ASPBI utilized stratified systematic sampling with 5-digit PSIC serving as the industry strata and employment size as the second stratification variable.

For establishments with TE of 20 and over, the 17 administrative regions serve as the geographic domains.

The industry domains (industry strata) for the survey were the 5-digit level (industry sub-class) of the 2009 PSIC. For the manufacturing sector, 424 industry sub-classes serve as the industry domain.

Estimation Procedure

For Establishments with TE of 20 and Over

a.    Non-Certainty Stratum (TE of 20-49 and 50-99)

The estimate of the total of a characteristic (  ) for the non-certainty employment stratum in TE of 20 and over for an industry domain in each region (geographic domain) is

where:

             s     denotes the non-certainty employment stratum in TE of 20 and over

             p     = 1, 2,..., 17  regions (geographic domains)

             x_spj  = value of the j^th establishment in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

              j     =  1, 2, 3,…, n_sp establishments

          W_spj   = weight of the j^th establishment in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

   N_sp  = total number of establishments in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

   n_sp  = number of sample establishments in the non-certainty employment stratum in TE of 20 and over for an industry domain in each region

b.  Certainty Stratum

The estimate of the total of a characteristic (  ) for the certainty employment stratum in TE of 20 and over in an industry domain in each geographic domain (region) is

where:  

          c     denotes the certainty employment stratum in TE of 20 and over

          p    = 1, 2,..., 17 regions (geographic domains)

    x_cpj = value of the j^th establishment in the certainty employment stratum in TE of 20 and over in an industry domain within each region

 j     = 1, 2, 3, …, m_cp establishments

m_cp = number of establishments in the certainty employment stratum in TE of 20 and over in an industry domain within each region

Total Estimate for TE of 20 and over

The estimate of the total of a characteristic for the industry domain in each region (geographic domain) was obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,

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 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 factors, and (n/n’) was multiplied 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 and 50-99, the adjusted weight (W'_spj ) is  

Questionnaire Design

The questionnaire design is the same as that of the 2013 ASPBI. 

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. The number of manufacturing samples which utilized the web-based version of the questionnaire totaled 88 establishments, merely 2.0 percent of the total number of responding sample establishments.

Response Rate

The response rate for manufacturing establishments with TE of 20 and over was 86.5 percent (4,383 out of 5,069 establishments). Included are receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments, etc. 

Reports of the remaining non-reporting establishments were imputed based on established imputation methods and from other available administrative data sources.  However, reports of establishments in the certainty stratum, which were found to be duplicates and out of business in 2014, were not imputed.

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, homeworkers, workers receiving pure commissions only and workers not in the payroll of this establishment.

            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 employer to its employees and total employer’s contribution to SSS/GSIS, ECC, PhilHealth, PAG-IBIG etc.

Income or Revenue refers to cash received and receivables for goods sold and services rendered.

Expense refers to the cost incurred in an enterprise’s efforts to generate revenue, representing the cost of doing business. Excludes cost incurred in acquisition of income generating assets.

Value of output represents the sum of the sale of products and by-products, income from industrial services done for others, sale of goods  less cost of goods sold, fixed assets produced on own account, and change in inventories of finished products and work-in-progress.

Intermediate expense refers to expenses incurred in the production of goods and industrial services such as raw materials used; other materials and supplies used; fuels, lubricants, oils and greases used; electricity and water purchased and industrial services done by others.

Value added is gross output less intermediate input. Gross output for the manufacturing sector is value of output plus income from non-industrial services done for others (except rent income from land). Intermediate input is intermediate expense plus expense for non-industrial services done by others (except rent expense for land) and all 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 value of ending inventory less the total beginning inventory.

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.