Restaurant industry leads the sector in terms of number of establishments

The final results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI) showed that a total of 27,028 establishments in the formal sector of the economy were engaged in Accommodation and Food Service Activities.

Among industries, restaurants led the sector with 6,652 establishments, accounting for 24.6 percent of the total number of establishments.  Fast-food chains ranked second with 4,477 establishments or 16.6 percent, followed by refreshment stands, kiosks and counters with 3,772 establishments or 14.0 percent.

Other industries with more than a thousand number of establishments were the following:

• Cafeterias, 3,748 establishments
• Hotels  and motels, 2,276 establishments
• Bars and cocktail lounges, 1,445 establishments
• Other restaurants and mobile food service activities, n.e.c., 1,353 establishments

Figure 1 displays the percentage distribution of Accommodation and Food Service Activities establishments by industry sub-class in 2015.

Fast-food chains employ the most number of workers

Total employment generated by the sector reached 433,260 workers in 2015. Paid employees constituted 425,094 or 98.1 percent and the remaining 8,165 or 1.9 percent  were working owners and unpaid workers.

Among industries, fast-food chains employed the most number of workers with 130,304 (30.1%). Restaurants came in second with 116,556 workers (26.9%) of the total. Hotels and motels followed with 62,392 workers or 14.4 percent.

Figure 2 shows the distribution of employment for all Accommodation and Food Service Activities establishments by industry sub-class in 2015.

The  average  number  of  workers  per  establishment   for  the  sector  was  recorded  at  16 employees.

Six industries of the sector surpassed the national average of workers per establishment in 2015 these were the following:

• Resort hotels, 32 workers per establishment
• Fast-food chains, 29 workers per establishment
• Hotels and motels, 27 workers per establishment
• Event catering, 20 workers per establishment
• Restaurants, 18 workers per establishment
• Condotels, 17 workers per establishment

Camping sites/facilities pays the highest average annual compensation

In 2015, the sector paid a total compensation of PHP63.8 billion in 2015, translating to an average annual compensation of PHP150.0 thousand per employee.

By industry sub-class, restaurants paid the highest compensation of PHP19.7 billion or     30.9 percent of the total. Fast-food chains followed with PHP17.9 billion (28.1%). Hotels and motels ranked third with PHP12.0 billion or 18.9 percent.   

Establishments under camping sites/facilities industry paid the highest average annual compensation of PHP221,913  per employee. This was followed by hotels and motels with PHP196,044 per employee, not far behind was condotels with PHP185,486 per employee.

Completing the top six industries in terms of average annual compensation were as follows:

• Restaurants, PHP171,996 per employee
• Other restaurants and mobile food service activities, n.e.c., PHP158,139 per employee
• Event catering, PHP157,665 per employee

Figure 3 shows the average annual compensation per employee of the leading industries of  the sector in 2015.

Restaurants contribute the major share in income and expense

Total income generated by the sector in 2015 amounted to PHP471.3 billion.

Two industries generated more than one hundred billion pesos worth of  income and these were; restaurants with PHP158.1 (33.5%) and fast-food chains with PHP144.8 billion or      30.7 percent.

Other industries with more than 10.0 billion each in total income  were the following:

• Hotels and motels, PHP61.9 billion
• Resort hotels, PHP28.0 billion
• Refreshment stands, kiosks and counters, PHP17.7 billion
• Cafeterias, PHP15.8 billion
• Other restaurants and mobile food service activities, n.e.c.,PHP15.0 billion
• Bar and cocktail lounges, PHP10.9 billion

Total expense for all Accommodation and Food Service Activities amounted to PHP395.3 billion in 2015.

Among industries, restaurants and fast-food chains incurred more than half (63.8%) of the  total expense with PHP126.7 billion (32.0%) and PHP125.4 billion (31.7%) respectively. This was followed by hotels and motels with PHP56.1 billion (14.2%) and resort hotels with PHP23.6 billion or 6.0 percent of the total expense. More over, three industries spent more than ten billion pesos worth of shares of expense accounting for 9.9 percent of the total and these were:

• Refreshment stands, kiosks and counters, PHP14.0 billion
• Other restaurants and mobile food service activities, n.e.c., PHP13.6 billion
• Cafeterias, PHP11.6 billion

Figure 4 shows the top six industries in terms of income and expense for all Accommodation and Food Service Activities sector in 2015.

Income-expense ratio stands at 1.19

The income generated per peso expense stood at PHP1.19.  This means that for every peso spent, a corresponding income of PHP1.19 was generated.

By industries, other beverage serving activities, n.e.c., recorded the highest income-expense ratio with 1.50, followed closely by other food service activities with 1.49. Ranked third were cafeterias with 1.37 income-expense ratio. 

Restaurants generate the highest value added in 2015

Value added generated by the sector was estimated at PHP170.1 billion in 2015.

Restaurants registered the highest value added of PHP57.2 billion or 33.6 percent of the total.  This was followed by fast-food chains with PHP45.9 billion (27.0%). Completing the top three was hotels and motels with PHP27.0 billion or 15.9 percent.

Most productive are employees of camping sites/facilities

Labor productivity (value added per total employment), for Accommodation and Food Service Activities sector stood at PHP392.5 thousand per worker.

Camping sites/facilities establishments employed the most labor productive workers with  PHP861.8 thousand per worker. Other restaurants and mobile food service activities, n.e.c., followed with PHP596.8 thousand while other beverage serving activities, n.e.c. with PHP592.2 thousand per worker.

Figure 5 displays the top six industries as to labor productivity  in 2015.

Gross additions to fixed assets reach PHP24.3 billion

In 2015, gross additions to fixed assets (capital expenditures less sale of fixed assets) acquired by all establishments in Accommodation and Food Service Activities sector was valued at PHP24.3 billion.

More than half or 57.6 percent of the total gross additions to fixed assets was recorded by restaurants with PHP14.0 billion. This was followed by hotels and motels with PHP5.9 billion or   24.3 percent. Fast-food chains ranked third with PHP2.3 billion or 9.5 percent of the total.

Total change in inventory amounts to PHP2.2 billion

Change in inventories, defined as the value of ending less beginning inventory, was valued at PHP2.2 billion in 2015.

The top three industries accounted for 62.0 percent of the total.  Fast-food chains had the highest change in inventory with PHP508.8 million or 23.4 percent of the total change in inventory. Hotels and motels followed with PHP489.6 million or 22.5 percent and restaurants with PHP354.6 million (16.3%).

Sales from e-commerce totals to PHP4.9 billion in 2015

E-commerce sales generated by the sector amounted to PHP4.9 billion in 2015, accounting for merely 1.0 percent of the total income. Among industries that reported e-commerce transactions during the year, hotels and motels recorded the highest sales of PHP3.9 billion or 80.6 percent of the total income of the industry.  Resort hotels and restaurants followed with sales of PHP871.7 million and PHP77.5 million respectively.

TECHNICAL NOTES

Introduction

This Special Release presents the final results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI) for all establishments of Accommodation and Food Service Activities sector.

The 2015 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 for the year 2015.

The survey was conducted nationwide in 2016 with the year 2015 as the reference period of data, except for employment which is as of November 15, 2015.

Establishment Data Management System (EDMS) was still utilized in the decentralized processing of 2015 ASPBI questionnaires in the province as well as the online accomplishment of questionnaire through the PSA website.

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

Legal Authority

The conduct of the 2015 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 2015 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 partnerships
•  Cooperatives and foundations
•  Single proprietorship with employment of 10 and over
•  Single proprietorship with branches

Hence, the 2015 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).

Frame of Establishments

The frame for the 2015 ASPBI was extracted from the 2015 List of Establishments (LE). The estimated number of establishments in operation in the country in 2015 totaled to 909,786. About 259,386 establishments (29.0% of the total establishments) belong to the formal sector of which 223,821 (86.3%) 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 2015 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. 

Industrial Classification of an economic unit was 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 of an establishment 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  refers to the 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, 2015 was used for the 2015 ASPBI.

Methodology

Sampling Design

Selection of sample establishment for the 2015 ASPBI was done using stratified systematic sampling with 5-digit PSIC serving as industry strata and employment size as the second stratification variable.

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 s^th industry domain was

where:

 s   = denotes the non-certainty employment strata in TE of less than 20

 Xsj = value of the j^th establishment in non-certainty employment stratum in TE of less than 20 in S^th industry domain

 j      =  1,2,3..., n_s establishments

 W_sj = weight of the j^th establishment in the non-certainty employment stratum of less than 20 in the s^th industry domain

 N_s  = total number of establishments in the non-certainty employment stratum in TE of less than 20 in the s^th industry domain

n_s  = number of sample establishments in the non-certainty employment stratum in TE of less than 20 in s^th domain

b. Certainty Stratum

    The total of a characteristic for the certainty employment stratum in the C^th industry domain was

where:

 c   = denotes the certainty employment strata in TE of less than 20 in the c^th industry

 x_cj = value of the j^th establishment in the certainty employment strata in TE of less than 20 in the c^th industry domain

 j      = 1,2,3,..., m_c establishments 

 m_c  = number of establishments in the certainty employment strata in TE of less than 20 in the c^th 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 characteristicfor 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.

Estimation Procedure 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 A,C,E,F,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 

where:

      s = denotes the non-certainty employment strata in TE of 20 to 49 and TE 50 TO 99        

      p = 1, 2,..., 18 regions (geographic domains)        

   X_spj = value of the j^thestablishment in the non-certainty employment strata with TE of 20 to 49 and TE 50 to 99 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 strata with TE of 20 to 49 and TE 50 to 99 for an industry domain in each region                                                                                                                                                                                      

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

    n_sp = 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 (Establishments under the following: Section B and D, ICT core industries, BPM industries, GOCC's and with TE 100 and over)

       The estimate of the total of a characteristic for the certainty employment stratum in an industry domain in each region

where:

       c = denotes the certainty employment strata in TE of 20 and over        

       p = 1,2,...18 regions (geographic domains)

   X_cpj = value of the j^thestablishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region 

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

  m_cp = 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'_spj) for the non-certainty employment stratum for the industry domain with TE 20-99 was

Where:

 N_sp = total number of establishments in the non-certainty employment stratum with TE 20-99 for the 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 industry domain within each geographic domain (region)

Response Rate

Response rate for all Accommodation and Food Service Activities sector  was 92.8 percent (1,232 out of 1,327 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments. 

Of the total responses, 15 establishments responded online.

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 2015.

Limitation of Data

Only the formal sector was covered in the survey.

Concepts and Definitions of Terms

Establishment  is defined as 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.

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, 2015.

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. Valuation is at producer prices (ex-establishment) net of discounts and allowances, including duties and taxes but excluding subsidies.

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 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.

Value added  is gross output less intermediate input. Gross output for Accommodation and Food Service Activities sector is the sum of total income (less interest income, rent income from land, dividend income, royalty income and franchise income), capital expenditures of fixed assets produced on own account, and change in inventory. Intermediate input is equal to the sum of the following expense 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 (less rent expense for land); goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee; and other expense.