Sand and gravel quarrying industry dominates the sector in terms of number of establishments

The final results of the 2014 Annual Survey of Philippine Business and Industry (ASPBI) showed that there were 256 establishments engaged in the mining and quarrying activities in the formal sector of the economy. More than-half (53.5%) or 137 establishments of the total count were establishments with total employment of 20 and over while the remaining 46.5 percent or 119 were establishments with total employment of less than 20.

Among the industry sub-classes, sand and gravel quarrying recorded the highest number of establishments with 57 or 22.3 percent of the total. Gold ore mining placed second with 34 establishments or 13.3 percent of the total. Nickel ore mining and stone quarrying, clay and sand pits, n.e.c. posted third and fourth places with 26 establishments (10.2%) and 24 establishments (9.4%), respectively.

Other industries with more than five percent share in terms of the number of establishments are as follows:

• Support activities for other mining and quarrying, 19 establishments (7.4%)
• Limestone quarrying, 18 establishments (7.0%)
• Extraction of salt, 15 establishments (5.9%)

Figure 1 displays the percentage distribution of all mining and quarrying establishments by industry sub-class in 2014.

Nickel ore mining industry employs on the average 929 workers per establishment

Total employment of all mining and quarrying establishments reached 37,214 workers in 2014. Of the total workforce, 37,104 or 99.7 percent were paid employees while the remaining 0.3 percent were working owners and unpaid workers.

By industry, nickel ore mining which was third in rank in terms of the number of establishments employed the biggest number of workers recorded at 9,828 or 26.4 of the total employment of the sector.   Gold ore mining with 9,422 workers (25.3%) placed second. Copper ore mining occupied the third spot with 8,357 workers or 22.5 percent of the total.

Figure 2 shows the distribution of employment for all mining and quarrying establishments by industry sub-class in 2014.

The average number of workers per establishment for the sector was recorded at 145.  Among industries, copper ore mining generated the highest average number of workers per establishment with 929 employees, about six times more than the sector’s average. This was followed by nickel ore mining and mining of hard coal with respective average of 378 and 301 workers. Other industries with average number of workers of more than 100 are as follows:

• Gold ore mining, 277 workers
• Extraction of natural gas, 148 workers

Average annual compensation highest for nickel ore mining industry

Total compensation paid by the sector to its employees amounted to PHP13.0 billion, accounting for 9.8 percent of the total expense in 2014.

By industry, nickel ore mining paid the highest compensation of PHP3.4 billion, comprising  26.6 percent of the total. Gold ore mining paid second highest with PHP3.3 billion (25.9%), followed by copper ore mining with PHP2.8 billion (21.8%).

In 2014, mining and quarrying sector paid an average annual compensation of PHP347,823. At the industry level, extraction of natural gas received the highest average annual pay of PHP2.1 million. Extraction of crude petroleum followed with average annual compensation of PhP1.2 million. Oil and gas extraction activities on a fee or contract basis and support activities for other mining and quarrying industries were paid on the average, PHP1.0 million and PHP0.4 million per year, respectively.

Figure 3 presents the average annual compensation of employees for all mining and quarrying establishments by industry sub-class in 2014.

Extraction of natural gas industry generates the highest value of output

In 2014, value of output generated by all mining and quarrying establishments was estimated at PHP213.8 billion.

Value of output generated by the top three industries comprised more than three-fourths (77.9%) of the total. Nickel ore mining led all industries, producing PHP72.1 billion or 33.7 percent of the total value of output. Extraction of natural gas placed second while copper ore mining occupied the third spot with respective output value of PHP63.5 billion (29.7%) and PHP31.0 billion (14.5%).

The percent shares of the next three highest industries are as follows:

• Mining of hard coal, PHP19.1 billion, 8.9 percent
• Gold ore mining, PHP12.4 billion, 5.8 percent
• Support activities for other mining and quarrying, PHP7.0 billion, 3.2 percent

Figure 4 shows the percentage distribution of value of output for all mining and quarrying establishments by industry sub-class in 2014.

Total expense reaches PHP131.2 billion

Total expense, including compensation, incurred by all mining and quarrying establishments in 2014 was estimated at PHP131.2 billion.

Nickel ore mining spent the highest among industries with PHP44.7 billion or 34.0 percent of the total expense. This was followed by copper ore mining with PHP23.7 billion or 18.0 percent share. Extraction of natural gas ranked third with PHP20.9 billion (16.0%).

Extraction of natural gas industry records the highest returns

Income per expense ratio stood at 1.57. This means that for every peso spent, corresponding income of PHP1.57 was generated.

Among industries, extraction of natural gas recorded the highest income per expense ratio of 2.76. Extraction of crude petroleum and nickel ore mining placed second and third with respective ratios of 1.71 and 1.65.

On the other hand, industries with ratios of less than 1.00 are as follows:

• Gold ore mining, 0.97
• Oil and gas extraction activities not performed on a fee or contract basis, 0.91
• Oil and gas extraction activities on a fee or contract basis, 0.90
• Mining of iron ores, 0.89

Extraction of natural gas industry generates the highest value added

Value added generated in 2014 by all mining and quarrying establishments was estimated at PHP135.6 billion.

By industry, extraction of natural gas generated the biggest share amounting to PHP54.6 billion or 40.2 percent of the total value added. Nickel ore mining came in next with PHP40.2 billion (29.7%), followed by copper ore mining with PHP19.9 billion (14.7%).

Other industries with at least 3.0 percent share to the total value added are the following:

• Gold ore mining, PHP8.8 billion (6.5%)
• Mining of hard coal, PHP5.6 billion (4.2%)
• Support activities for other mining and quarrying, PHP4.3 billion (3.2%)

Extraction of natural gas industry generates highest labor productivity

The ratio of value added to employment, a simple measure of labor productivity, was recorded at PHP3.7 million per worker in 2014.

Extraction of natural gas generated the highest labor productivity in 2014, amounting to PHP122.9 million per worker. This was followed by extraction of crude oil (PHP7.5 million), nickel ore mining (PHP4.1 million), support activities for other mining and quarrying (PHP3.8 million),  copper ore mining (PHP2.4 million) and mining of hard coal (PhP1.7 million) per worker.

Figure 5 shows the labor productivity for all mining and quarrying establishments by industry sub-class in 2014.

Extraction of natural gas industry contributes the biggest share in gross addition to tangible fixed assets

Gross addition to tangible fixed assets acquired in 2014, defined as capital expenditures less sale of fixed assets, was valued at PHP32.4 billion.

At the industry level, extraction of natural gas acquired PHP7.6 billion or nearly one-fourth (23.5%) of the total value of gross additions to tangible fixed assets. This was followed by copper ore mining with PHP7.1 billion (22.1%).

Other industries with a billion mark shares are as follows:

• Gold ore mining, PHP6.7 billion (20.6%)
• Mining of hard coal PHP5.8 billion (17.9%)
• Nickel ore mining, PHP3.1 billion (9.6%)
• Support activities for other mining and quarrying, PHP1.6 billion (4.9%)

Total subsidies received by the sector reach PHP990.6 million

Subsidies granted by the government to support the business operation of mining and quarrying sector amounted to PHP990.6 million. Only two industries received subsidies in 2014.  These are nickel ore mining and gold ore mining with PHP974.9 million (98.4%) and PHP15.7 thousand        (1.6%), respectively.

 

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TECHNICAL NOTES

This Special Release presents the final results of the 2014 ASPBI for the mining and quarrying (Sector B) establishments.

The 2014 ASPBI is one of the designated statistical activities of the Philippine Statistics Authority (PSA). Data collected from the survey provide information on the levels, structure, performance, and trends of economic activities of the formal sector in the entire country. The 2014 Survey of Tourism Establishment in the Philippines (STEP) was undertaken as a rider to the survey. The field operation of the 2014 ASPBI also integrated the data collection in updating the 2014 List of Establishment (ULE).

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

Like the 2013 ASPBI operation, the data processing for this survey was decentralized to the Provincial Statistics Service Offices (PSSSOs) as the provinces are near the establishments which are the data source of the survey.

Data are presented at the national, regional and industry sub-class or 5-digit 2009 Philippine Standard Industrial Classification (PSIC).

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 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 of Motor Vehicles and 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)

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

Thus, 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 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 239,000 (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 a specific date. 

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

Methodology

All establishments in the formal sector for the Mining and Quarrying 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  for the certainty employment stratum 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 Mining and Quarrying Sector was 80.5 percent (306 out of 380 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 imputed based on established imputation methods and from other available administrative data sources.  However, reports of establishments which were found to be duplicates and out of business in 2014, were not imputed.

Limitation of Data

The 2014 ASPBI covered only the formal sector of the economy.

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.

Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchaser prices including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.

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

Intermediate expense are expenditures incurred in the production of goods such as materials and supplies purchased, fuels purchased, electricity and water 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 the mining and quarrying 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 other costs.

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

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

Change in inventories is equivalent to the value of inventories at the end of the year less the value of inventories at the beginning of the year.

Inventories refer to the stock of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation is at current replacement cost in purchaser prices. Replacement cost is the cost of an item in terms of its present price rather than its original cost.

Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry.