Restaurants and mobile food service activities industry posts the highest number of establishments

The preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for the formal sector of the economy showed that a total of 5,971 establishments with total employment (TE) of 20 and over were engaged in Accommodation and Food Service Activities.

Restaurants and mobile food service activities led the sector with 4,312 establishments accounting for 72.2 percent of the total number of establishments. This was followed by short term accommodation activities with 1,279 establishments (21.4%) and beverage serving activities with 285 establishments (4.8%). Combined total number of establishments for event catering and other food service activities, and other accommodation was registered at 95 (1.6%)..

Figure 1 displays the percentage distribution of Accommodation and Food Service Activities establishments with TE of 20 and over by industry group in 2016.

Among regions, National Capital Region (NCR) had the most number of establishments with 2,400 or 40.2 percent of the total number of establishments for the sector. On the second spot was CALABARZON with 756 establishments or 12.7 percent. Completing the top three regions with most number of establishments was Central Luzon with 597 (10.0%). On the other hand, ARMM had the least number of establishments with merely 0.1 percent.

Restaurants and mobile food service activities industry employs the highest

The total employment generated by the sector reached 279,048 in 2016. Out of this number, 277,509 workers (99.4%) were paid employees while the rest of the workers were working owners or unpaid workers.

Among the industry groups, the leading industry as to employment generation was restaurants and mobile food service activities with 183,319 workers or 65.7 percent of the total for the sector. Short term accommodation activities and beverage serving activities employed 82,227 (29.5%) and 8,254 (3.0%) employees, respectively.

Figure 2 shows the distribution of employment for the sector by industry group in 2016.

Region-wise, NCR was the top employer with 117,041 workers or 41.9 percent, followed by CALABARZON with 32,103 (11.5%). Central Visayas was third with 25,203 workers (9.0%). ARMM recorded the least number of workers at 213 workers or only 0.1 percent.

The average number of workers per establishment for the sector was recorded at 47.

By industry group, short term accommodation activities, and event catering and other food service activities with 64 and 56 workers per establishment, respectively, surpassed the national average

Short term accommodation activities industry pays the highest average annual compensation

Total compensation paid by the sector reached to PHP53.1 billion in 2016, equivalent to an average annual compensation of PHP191.4 thousand per employee.

Among industries, restaurants and mobile food service activities paid the highest compensation of PHP33.3 billion (62.7%). Short term accommodation activities followed with PHP17.9 billion (33.6%). Event catering and other food service activities ranked third with PHP988.1 million (1.9%). On the other hand, other accommodation recorded the least compensation with PHP13.4 million.

Short term accommodation activities paid the highest average annual compensation of PHP218,771 per employee. This was followed by event catering and other food service activities receiving an average annual pay of PHP195,822. Restaurants and mobile food service activities placed third with PHP181,922 average annual compensation per employee.

Figure 3 displays the average annual compensation of employees for the sector with TE of 20 and over by industry group in 2016.

Region-wise, NCR paid the highest average annual compensation of PHP276,864 per employee, higher than the national average. On the other hand, ARMM paid the lowest average annual compensation of PHP57,639 per employee.

Restaurants and mobile food service activities industry accounts for the largest income and expense

Income generated by the sector for establishments with TE of 20 and over reached PHP368.3 billion in 2016.

Restaurants and mobile food service activities was the top contributor with total income of PHP242.1 billion or 65.7 percent of the total income for the sector. Second in rank was short term accommodation activities with income amounting to PHP112.5 billion (30.5%). Beverage serving activities placed third with PHP6.9 billion (1.9%). Other accommodation had the least share in income with PHP77.3 million (0.02%).

Among regions, NCR generated a total income of PHP182.8 billion, almost half of the total income for the sector. Three regions contributed more than PHP20.0 billion each in total income in 2016 and these were the following:

• Central Visayas, PHP29.6 billion
• Central Luzon, PHP26.8 billion
• CALABARZON, PHP25.3 billion

Total expense including compensation incurred by the sector amounted to PHP312.3 billion in 2016.

Among industries, restaurant and mobile food service activities incurred the highest share in expense amounting to PHP207.7 billion or 66.5 percent. Short term accommodation activities spent a total of PHP93.0 billion or 29.8 percent. Beverage serving activities came next with PHP6.2 billion (2.0%). The remaining PHP5.4 billion (1.7%) were incurred by event catering and other food service activities (PHP5.3 billion) and other accommodation (PHP73.6 million). Figure 4 displays the income generated and expense incurred for Accommodation and Food Service Activities sector by industry group in 2016.

At the regional level, NCR spent PHP186.7 billion, more than half of the total expense of the sector. Other regions with more than five percent share in total expense in 2016 were as follows:

• Central Visayas, PHP24.7 billion or 7.9 percent
• Central Luzon, PHP22.7 billion or 7.3 percent
• CALABARZON), PHP20.0 billion or 6.4 percent

Income-expense ratio stands at 1.18; event catering and other food service activities industry generates the highest returns

Income-expense ratio, the income generated per peso expense stood at 1.18. This means that for every peso spent, a corresponding income of PHP1.18 was generated.

By industry group, event catering and other food service activities recorded the highest returns of 1.25, followed by short term accommodation activities with 1.21. The lowest returns was recorded by other accommodation with 1.05 income per expense ratio.

At the regional level, CAR recorded the highest returns of 1.36, followed by Bicol region with income-expense ratio of 1.30.

Value added reaches PHP135.2 billion

Value added generated by the sector for establishments with TE of 20 and over in 2016 was estimated at PHP135.2 billion.

Restaurants and mobile food service activities industry recorded as the top contributor to value added with PHP76.5 billion or 56.6 percent of the total for the sector. Next to it was short term accommodation activities with PHP54.2 billion (40.1%). Establishments engaged in event catering and other food service activities, beverage serving activities and other accommodation had a combined value added of PHP4.4 billion or 3.3 percent.

At the regional level, more than 50 percent of the total value added for the sector was generated by NCR amounting to PHP79.1 billion (58.5%). Central Visayas and CALABARZON were far next with PHP12.0 billion (8.8%) and PHP10.4 billion (7.7%), respectively. Meanwhile, ARMM had the least value added with only PHP36.2 million or 0.03 percent.

Short term accommodation emerges as most labor productive industry

Labor productivity, defined as value added per total employment, was estimated at PHP484.5 thousand per worker for the sector in 2016.

Short term accommodation activities with PHP659.4 thousand per worker and event catering and other food service activities with PHP509.5 thousand per worker exceeded the labor productivity at the national level in 2016. On the other hand, other accommodation generated the least labor productivity of PHP167.0 thousand per worker. Figure 5 displays the labor productivity for the sector by industry group in 2016.

Among regions, the most labor productive was NCR, generating a labor productivity of PHP675.6 thousand per worker. Central Visayas came next with PHP474.7 thousand per worker. Completing the top three regions was MIMAROPA with PHP418.0 thousand per worker.

Gross additions to tangible fixed assets amount to PHP6.5 billion

Gross additions to tangible fixed assets acquired by the sector in 2016 was valued at PHP6.5 billion.

By industry, establishments engaged in short term accommodation activities contributed the highest acquisition of fixed assets worth PHP4.5 billion (69.7%). Restaurants and mobile food service activities followed with acquired total fixed assets of PHP1.7 billion (27.0%). The remaining PHP213.9 million (3.3%) was generated by event catering and other food service activities (PHP193.4 million) and beverage serving activities (PHP20.5 million).

Across regions, NCR acquired the highest gross additions to tangible fixed assets of PHP2.1 billion or 33.0 percent share to the total gross additions to fixed assets. Three regions acquired more than PHP500 million worth of gross additions to fixed assets in 2016 and these were the following:

• CALABARZON, PHP823.9 million (12.8%)
• Ilocos, PHP645.5 million (10.0%)
• Central Visayas, PHP547.6 million (8.5%)

Total change in inventories amounts to PHP1.3 billion

Change in inventories (defined as the value of ending inventory less beginning), for the sector amounted to PHP1.3 billion in 2016.

Restaurants and mobile food service activities recorded the highest inventories amounting to PHP832.4 million or 62.0 percent of the total change in inventories for the sector. Short term accommodation activities followed with PHP486.0 million (36.2%). Event catering and other food service activities ranked third with PHP21.3 million (1.6%).

Among regions, NCR posted the highest share in change in inventories amounting to PHP887.2 million. Five regions generated more than PHP50.0 million worth of change in inventories in 2016 and these were the following:

• Central Luzon, PHP95.5 million
• Central Visayas, PHP69.4 million
• Cagayan Valley, PHP60.9 million
• MIMAROPA, PHP56.9 million
• Western Visayas, PHP52.0 million

Sales from e-commerce reaches PHP5.6 billion

E-commerce sales of the sector for establishments with TE of 20 and over amounted to PHP5.6 billion in 2016.

About 98.0 percent or PHP5.5 billion of the total e-commerce sales recorded for the sector was generated by short term accommodation activities. Among regions, NCR generated the highest sales from e-commerce amounting to PHP3.4 billion (60.6%).

TECHNICAL NOTES

Introduction

This Special Release presents the preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for Accommodation and Food Service Activities for establishments with total employment of 20 and over.

The 2016 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 2016.

The survey was conducted nationwide in 2017 with the year 2016 as the reference period, except for employment where the reference period is November 15, 2016.

Establishment Data Management System (EDMS) was utilized in the decentralized processing of 2016 ASPBI questionnaires in the provinces 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 2016 ASPBI is authorized under Republic Act 10625, known as the Philippine Statistical Act of 2013, which mandates reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.

Scope and Coverage

The 2016 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 2016 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 2016 ASPBI was extracted from the 2016 List of Establishments (LE). The estimated number of establishments in operation in the country in 2016 totaled to 902,213. About 294,494 establishments (32.6% of the total establishments) belong to the formal sector of which 255,403 (86.7%) 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 2016 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.

Taxonomy 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, 2016 was used for the 2016 ASPBI.

Sampling Design

Selection of sample establishment for the 2016 ASPBI was done using stratified systematic sampling with 3-digit or 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

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

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 to 49 and TE 50 to 99 for an industry domain in each region

    n_sp = number of sample establishments in the non-certainty employment strata in TE of 20 to 49 and TE 50 to 99 for an industry domain in each region

 

   b.  Certainty Stratum (Establishments under the following: Section B, D and J, ICT core industries, BPM industries, GOCC's 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,...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 Accommodation and Food Service Activities sector for establishments with TE of 20 and over was 86.4 percent (917 out of 1,061 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, twenty six 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 2016.

Limitation of Data

Only the formal sector was covered in the survey.

Concepts and Definitions of Terms

Establishment is an economic unit under a single ownership and 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, 2016.

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 the 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 inventories. 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; goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee; payouts and other expense.