Central Luzon leads in terms of number of establishments

The final results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI) showed that there were a total of 259 establishments engaged in electricity, gas, steam and air conditioning supply in the formal sector of the economy. Of this total, establishments with total employment (TE) of 20 and over constitute 86.1 percent or 223 establishments while establishments with total employment of less than 20 was about 36 or 13.9 percent.

The top three regions, in terms of number of establishments, accounted for almost one-third (32.0%) of the total number of establishments. Central Luzon led the regions with 32 establishments or 12.4 percent of the total. This was followed by Central Visayas with 26 establishments (10.0%) and CALABARZON with 25 establishments (9.7%). On the other hand, three regions recorded the least count with only 6 establishments (2.3%) each. These are National Capital Region (NCR), Zamboanga Peninsula and Autonomous Region in Muslim Mindanao (ARMM).

Figure 1 shows the regional distribution of all electricity, gas, steam, and air conditioning supply establishments in 2014.

Total employment highest for Central Luzon

In 2014, electricity, gas, steam and air conditioning supply sector employed a total of 46,881 workers. Establishments with total employment of 20 and over hired a total of 46,561 workers comprising 99.3 percent of the total workforce while establishments with total employment of less than 20 hired only 320 workers or 0.7 percent of the total.

The top three regions, in terms of employment generation, were all located in Luzon. NCR, despite  recording  the least  number  of  establishments,  employed  the  most  number  of workers  with 9,401  or  20.1  percent of the total. This was followed by Central Luzon with 5,257 workers (11.2%) and CALABARZON with 4,733 workers (10.1%).

The average number of workers per establishment for the sector was recorded at 181. NCR recorded the highest average employment of 1,567, followed by Zamboanga Peninsula and Cagayan Valley with 229 and 208 workers per establishment, respectively.

Establishments in CALABARZON pay the highest average annual compensation

Total compensation which consists of gross salaries and wages, separation and retirement/terminal pay, gratuities, employers’ contribution to SSS/GSIS, and other benefits amounted to PHP32.7 billion in 2014. This translates to an average annual compensation of PHP698,489 per employee.

A total of PHP32.4 billion (99.0%) was paid by establishments with total employment of 20 and over or an average annual compensation of PHP696,107 per employee. On the other hand, PHP0.3 billion (0.1%) was paid by establishments with total employment of less than 20 or an average compensation of PHP1,045,181 per employee.

By region, employees in CALABARZON received the highest average annual pay of PHP1,092,015. This was followed by employees in NCR receiving an average annual compensation of PHP990,576. Employees in Eastern Visayas were the third highest paid earning an annual pay of PHP951,822. Employees in ARMM were the least paid with PHP207,892 average annual pay.

Figure 2 shows the average annual compensation of employees for electricity, gas, steam and air-conditioning supply establishments by region in 2014.

Value of output sums up to PHP732.2 billion

Total value of output generated by the sector amounted to PHP732.2 billion. Establishments with total employment of 20 and over generated a total of PHP720.8 billion or 98.4 percent  of value of output, while establishments with  total  employment  of  less  than  20 recorded  PHP11.4 billion (1.6%).

Among  the regions, NCR   generated   the   highest  value  of  output  with  PHP222.5 billion  representing  30.4  percent   of   the   total,  followed  by  CALABARZON  with  PHP142.3 billion or  19.4 percent. Central Luzon placed third with value of output equivalent to PHP85.6 billion or 11.7 percent. ARMM reported the least value of output at PHP0.8 billion or 0.1 percent of the total.

Figure 3 shows the value of output for all electricity, gas, steam and air conditioning supply establishments by region in 2014.

Total expense amounts to PHP653.2 billion

Total expense, including compensation, incurred in business operation in 2014 amounted to PHP653.2 billion. A total of PHP643.1 billion or 98.5 percent of total expense was spent by establishments with total employment of 20 and over and the remaining PHP10.1 billion (1.5%) by establishments with total employment of less than 20.

NCR spent the highest among the regions estimated at PHP193.1 billion (29.6%), followed by CALABARZON spending PHP134.0 billion (20.5%). Central Luzon placed third with PHP76.8 billion (11.8%). ARMM spent the least amount with only PHP1.0 billion (0.2%).

Cordillera Administrative Region leads in terms of income per expense ratio

Income per expense ratio for the sector in 2014 was recorded at 1.19, indicating that for every peso spent PHP1.19 was realized in terms of income.

Among regions, establishments in CAR registered the highest return at 1.70 income per peso expense. This was followed by Ilocos Region and Northern Mindanao, with 1.65 and 1.40 income per peso expense ratios, respectively.

NCR contributes the highest share to value added

Value added, defined as gross output less intermediate input, generated by all electricity, gas, steam and air conditioning supply establishments reached PHP189.2 billion in 2014. Establishments with total employment of 20 and over contributed PHP185.9 billion or 98.3 percent to total value added. Whereas establishments with total employment of less than 20 produced only PHP3.3 billion or 1.7 percent of the total.

By region, NCR  accounted  for  the  biggest  share  to  total  value added amounting to PHP59.8 billion or 31.6 percent of the total, followed by CALABARZON and Central Luzon with PHP33.0 billion (17.4%) and PHP17.6 billion (9.3%), respectively.

CALABARZON records highest labor productivity at PHP7.0 million per worker

The ratio of value added per worker, a simple measure of labor productivity, was computed at PHP4.0 million per worker. Labor productivity of establishment with total employment of 20 and over was posted at about PHP4.0 million per worker while establishment with total employment of less than 20 at PHP10.3 million per worker.

By region, establishments located in CALABARZON were the most productive, recording a ratio of almost PHP7.0 million per worker. This was followed by establishments in SOCCSKARGEN and NCR with respective productivity of PHP6.7 million and PHP6.4 million per worker.

Gross addition to tangible fixed assets amounts to PHP46.5 billion

Gross addition to tangible fixed assets, defined as capital expenditures less sale of fixed assets, was estimated at PHP46.5 billion in 2014. By employment size, establishments with total employment of 20 and over acquired PHP41.0 billion or 88.3 percent of the total and the remaining PHP5.4 billion or 11.7 percent was contributed by establishments with total employment of less than 20.

Total subsidies received for the sector reaches PHP11.3 billion

Total subsidies provided by the government to support the business operations of the sector was estimated at PHP11.3 billion. By employment size, subsidies received by establishments with total employment of 20 and over amounted to PHP11.1 billion or 98.7 percent of the total while establishments with total employment of less than 20, PHP0.1 million or 1.3 percent.

Among regions, NCR received the highest subsidies estimated at PHP2.2 billion or 19.6 percent of the total. This was followed by Northern Mindanao with subsidies amounting to PHP1.8 billion (15.7%) and Bicol Region with PHP1.4 billion (12.2%), respectively.

TECHNICAL NOTES

Introduction

This Special Release presents the final results of the 2014 ASPBI for the Electricity, Gas, Steam and Air Conditioning Supply (Sector D) for all employment sizes.

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 field operation of the 2014 ASPBI also integrated the data collection in updating the 2014 List of Establishments (ULE).

The survey was conducted nationwide in 2015 with the year 2014 as the reference period of data, 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 Statistics 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 sub-group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC).

Legal Authority

The conduct of the 2014 ASPBI is authorized under the following:

Republic Act 10625 known as the Philippine Statistical Act of 2013 – (Reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities). It shall be the policies 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 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:

• 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)

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

• Public Administration and Defense; Compulsory Social Security (O)
• Activities of Household as Employee. Undifferentiated Goods and Services Producing Activities of Household for Own Use (T)
• Activities of Extraterritorial Organizational Bodies (U)

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

• Corporations and partnership
• Cooperatives and foundations
• Single proprietorship with employment of 10 and over
• Single proprietorships with branches

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

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

Frame of Establishments

The frame for the 2014 ASPBI was extracted from the 2014 List of Establishments (LE). The estimated number of establishments in operation in the country in 2014 totaled to 941,000. About 263,000 establishments (28.0% of the total establishments) belong to the formal sector of which 229,000 (87.0%) comprised the establishment frame. This frame was used to draw the sample establishments for the survey.

Unit of Enumeration

The unit of enumeration for the 2014 ASPBI is the establishment. An 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.

Classification of Establishments

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

Economic Organization refers 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 which owns the establishment. An establishment may be single proprietorship, partnership, government corporation, stock corporation, non-stock corporation, and cooperative.

The 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.

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

Geographic Classification. Establishments are also classified by geographic area using the Philippine Standard Geographic Code (PSGC).

Methodology

All establishments in the formal sector for the Electricity, Gas, Steam and Air Conditioning Supply Sector were covered on a 100 percent or on a certainty basis because of their relatively small number.

The estimate of the total of a characteristic  in an industry domain in each geographic domain (region) is

where:

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

x_pj= value of the j^th establishment in an industry domain within each region

j= 1, 2, 3, …,m_p establishments

m_p= number of establishments in an industry domain within each region

National level estimate of a characteristics by industry domain  was obtained by aggregating separately the estimates  for the particular industry domain from all the regions.

Response Rate

Response rate for Electricity, Gas, Steam and Air Conditioning Supply Sector was 81.2 percent (263 out of 324 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Reports of the remaining non-reporting establishments were taken from other available administrative data sources and financial statements from Securities and Exchange Commission (SEC). However, there were establishments which were found to be duplicates, out-of-scope and out of business in 2014.

Limitation of Data

Only the formal sector was covered in the survey.

Concepts and Definitions of Terms

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

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

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 is the sum of 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.

E-commerce refers to the selling of products or services over electronic systems such as Internet Protocol-based networks and other computer networks. Electronic Data Interchange (EDI) network, or other on-line system. Excluded are orders received from telephone, facsimile and e-mails.

Expense refers to cost incurred in an enterprise effort to generate revenue, representing the cost of doing business. This is treated on a consumed basis. It excludes cost incurred in the acquisition of income generating assets.

Intermediate expense are expenditures incurred in the production of goods such as 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 electricity, gas, steam, and air conditioning supply 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 expenses.

Value of output represents the sum of the receipts from revenue from main activity, income from industrial services done for others, goods sold in the same condition as purchased  less the cost of goods sold and value of fixed assets produced on own account.

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.

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.