Water collection, treatment and supply industry leads the sector

The 2015 Annual Survey of Philippine Business and Industry (ASPBI) covered a total of 339 establishments with total employment (TE) of 20 and over engaged in water supply; sewerage, waste management and remediation activities.

Among the industries, water collection, treatment and supply led the sector with 304 establishments accounting for 89.7 percent of the total. This was followed by waste collection with 11 establishments or 3.2 percent of the total count.

Figure 1 shows the distribution of establishments with TE of 20 and over for water supply; sewerage, waste management and remediation activities sector by industry group in 2015.

The top three regions, in terms of number of establishments, comprised 44.0 percent of the total. These were Central Luzon (Region III) with 70 (20.6%), CALABARZON (Region IV-A) with 56 (16.5%) and Bicol Region (Region V) with 23 (6.8%). On the other hand, Cordillera Administrative Region (CAR) recorded the least count with only 3 establishments (0.9%).

Figure 2 shows the regional distribution of establishments  with TE of 20 and over for water supply; sewerage, waste management and remediation activities sector by industry group in 2014.

Water collection, treatment and supply industry employs 25,968 workers

Total workers employed by establishments with TE of 20 and over reached 28,558 in 2015. Of the total workforce, 28,553 workers were paid employees.

At the industry level, water collection, treatment and supply, recording the most number of establishments in 2015, was also the top employer with 25,968 workers or 90.9 percent of the total. Waste collection followed only with 1,147 workers (4.0%), while sewerage had 721 workers (2.5%).

Figure 3 shows the distribution of employment for water supply; sewerage, waste management and remediation activities sector for establishments with TE of 20 and over by industry group in 2015.

Among the regions, National Capital Region (NCR) employed the highest number of workers with 5,263 or 18.4 percent of the total, followed by Central Luzon with 4,649 (16.3%) workers. Completing the top three regions with the most number of workers is CALABARZON with 4,546 (15.9%).

Employees of waste collection industry are the highest paid

Total compensation paid in 2015 by establishments with TE of 20 and over, amounted to PHP11.2 billion, translating to an average annual compensation of PHP391,137 per employee.

Among industries, waste collection paid the highest average annual compensation of PHP609,157 per employee in 2015. This was followed by water collection, treatment and supply with average annual pay of PHP389,452 and materials recovery with PHP286,278 per employee. On the other hand, employees in waste treatment and disposal received the lowest annual pay of PHP198,715 per employee.

Figure 4 shows the average annual compensation of employees for water supply; sewerage, waste management and remediation activities sector for establishments with TE of 20 and over by industry group in 2015.

At the regional level, employees in NCR received the highest average annual pay of PHP813,117, followed by employees in Zamboanga Peninsula and MIMAROPA receiving an average annual compensation of PHP418,973 and PHP369,862, respectively. Meanwhile, employees in Autonomous Region in Muslim Mindanao (ARMM) received the lowest average annual compensation of PHP158,776.

Value of output of the sector reaches PHP79.3 billion

Total value of output generated by establishments with TE of 20 and over was estimated at PHP79.3 billion in 2015.

Water collection, treatment  and  supply industry, which produced the  highest output  value  of  PHP70.9 billion in 2015, accounted for the biggest share at 89.4 percent of the total. The shares of other industries to the total value of output in 2015 were as follows:

• Waste collection, PHP4.6 billion (5.9%)
• Materials recovery, PHP1.9 billion (2.4%)
• Sewerage, PHP1.4 billion (1.8%)
• Waste treatment and disposal, PHP0.3 billion (0.5%)

Figure 5 shows the distribution of value of output for water supply; sewerage, waste management and remediation activities sector for establishments with TE of 20 and over by industry group in 2015.

Among regions, NCR shared the biggest output value estimated at PHP48.3 billion or more than half (60.9%) of the total value of output. This was followed by Central Luzon and CALABARZON with respective output value of PHP8.3 billion (10.5%) and PHP6.4 billion (8.1%).

Total expense of the sector amounts to PHP59.1 billion

Total expense, which include compensation, amounted to PHP59.1 billion in 2015.

Among industries, water collection, treatment and supply incurred the highest expense amounting to PHP52.9 billion or 89.5 percent of the total. Waste collection and materials recovery followed next with PHP3.4 billion (5.6%) and PHP1.2 billion (2.1%), respectively.

At the regional level, more than half (59.6%) or PHP35.2 billion worth of total sector’s expense was incurred by establishments in NCR, the highest among the regions. Central Luzon and CALABARZON placed second and third spending PHP6.3 billion (10.6%) and PHP5.4 billion (9.2%), respectively.

Materials recovery industry records the highest returns

Income per expense ratio for establishments with TE of 20 and over in 2015 was recorded at 1.45, indicating that for every peso spent PHP1.45 was realized in terms of income.

Industries that surpassed the sector’s income per expense ratio were materials recovery and waste treatment and disposal with respective income-expense ratio of 1.52 and 1.47. The income-expense ratio of other industries in 2015 were as follows:

• Water collection, treatment and supply, 1.45
• Waste collection, 1.37
• Sewerage, 1.32

Among regions, Central Visayas registered the highest return with income per expense ratio of 2.07. Davao Region and SOCCSKSARGEN placed second and third with 1.59 and 1.58 income per peso expense, respectively.

Value Added of the sector stands at PHP44.7 billion

Value added generated by establishments with TE of 20 and over reached PHP44.7 billion in 2015.

Among industries, water collection, treatment and supply contributed the biggest share to value added amounting to PHP41.1 billion or 91.9 percent of the total. Waste collection ranked second with PHP2.2 billion (5.0%), followed by materials recovery with PHP0.8 billion (1.8%).

At the regional level, NCR led the regions in terms of value added, generating PHP26.1 billion or more than half (58.4%) of the total. This was followed by Central Luzon and CALABARZON with respective shares of 10.2 percent (PHP4.6 billion) and 7.0 percent (PHP3.1 billion).

Labor productivity of the sector is PHP1.6 million per worker

The ratio of value added per worker, a measure of simple labor productivity, was estimated  at  PHP1.6 million for establishments with TE of 20 and over.

The highest labor productivity was recorded by materials recovery valued at PHP2.1 million per worker, followed by waste collection with  PHP1.9 million per worker. Labor productivity of other industries are as follows:

• Water collection, treatment and supply, PHP1.6 million per worker
• Sewerage, PHP0.7 million per worker
• Waste treatment and disposal, PHP0.4 million per worker

Figure 6 shows the labor productivity for water supply; sewerage, waste management and remediation activities sector for establishments with TE of 20 and over by industry group in 2015.

Regionwise, NCR was the most productive with about PHP5.0 million value added per worker while Central Luzon was second place with PHP1.2 million. Joining NCR and Central Luzon with million mark labor productivity were Central Visayas with PHP1.2 million value added per worker and Zamboanga Peninsula and Davao Region both with PHP1.1 million value added per worker.

Gross addition to tangible fixed assets of the sector amounts to PHP3.4 billion

Gross addition to tangible fixed assets, defined as capital expenditures less sale of fixed assets, was valued at PHP3.4 billion for establishments with TE of 20 and over.

Water collection, treatment and supply acquired PHP3.2 billion or 92.9 percent of the total. Gross addition to fixed assets of other industries are as follows:

• Waste collection, PHP160.7 million
• Materials recovery, PHP61.2 million
• Waste treatment and disposal, PHP21.3 million
• Sewerage, PHP1.0 million

Subsidy received by the sector amounts to PHP0.4 billion

Total subsidy provided by the government to support the business operations of establishments with TE of 20 and over in 2015 amounted to PHP0.4 billion.

Water collection, treatment and supply industry was the only recipient of government subsidy in 2015.

TECHNICAL NOTES

Introduction

This Special Release presents the preliminary results of the 2015 ASPBI for the Water Supply; Sewerage, Waste Management and Remediation Activities sector for establishments with total employment of 20 and over.

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. 

The Establishment Data Management System (EDMS) is 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 by industry group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC) at the national and regional level.

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

Hence, the 2015 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 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 2014 ASPBI is the establishment.

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 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. 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 20 and over, the 18 administrative regions serve as the geographic domains while the 5-digit level of the 2009 PSIC serves as the industry domains.

Estimation Procedure for Establishments with TE of 20 and Over

1. Non-Certainty Stratum (strata of TE 20 to 49 and TE 50 to 99)

      Sections A, C, E, F G, H, I, K, L, M, N, P, Q, R and S.

The estimate of the total of a characteristic  for the non-certainty employment strata in an industry domain in each region,

where:

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

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

x_spj   = value of the j^th establishment in the non-certainty employment strata 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 strata in TE of 20 and over 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

2. Certainty Stratum (TE 100 and over) (Establishments under the following: Section B, D and J, ICT core industries, BPM industries, GOCCs and with  TE 100 and over)

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,..., 17 regions (geographic domains)

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

3. 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 factor (n/n’) was multiplied with the sampling weight (W) of each of the sampling unit. The sampling weight, 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 20-99 for the industry domain within each geographic domain (region)

Response Rate

Response rate for Water Supply; Sewerage, Waste Management and Remediation Activities sector for establishments with TE of 20 and over was 89.6 percent (303 out of 338 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments. 

Of the total responses, 19 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 or control which engages in one or predominantly one kind of 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.

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 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.

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.

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.

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 water supply; sewerage, waste management and remediation activities 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.

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.