Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles sector leads in terms of number of establishments

There were a total of 252,790 establishments in the formal sector of the Philippine economy in 2016, higher by 14.4 percent than the 220,923 establishments recorded in 2015.

Among sectors, Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles topped the list with 115,998 establishments or almost half (45.9%) of the total establishments. Accommodation and Food Service Activities ranked second (30,889 or 12.2%), followed by Manufacturing (28,003 or 11.1%) and Education (14,006 or 5.5%). On the other hand, Electricity, Gas, Steam and Air Conditioning Supply (265 or 0.1%) and Mining and Quarrying (219 or 0.1%) had the least number of establishments. (Figure 1)

Manufacturing sector employs the highest number of workers

Total employment reached 6,282,210 workers in 2016, an increase of 7.5 percent from the 5,841,436 workers in 2015.

Manufacturing had the highest number of workers (1,277,400 or 20.3%), followed by Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (1,114,717 or 17.7%), and Administrative and Support Service Activities (1,053,054 or 16.8%). Mining and Quarrying recorded the least number of workers (32,892 or 0.5%). (Figure 2)

Manufacturing sector incurs the highest compensation

Total compensation paid to employees in 2016 amounted to PHP1.6 trillion, an increase of  7.2 percent from PHP1.5 trillion in 2015.

Manufacturing paid the highest compensation of PHP353.6 billion, comprising more than   one-fifth or 21.6 percent of the total compensation of all sectors in 2016. Administrative and Support Service Activities and Financial and Insurance Activities followed with PHP260.5 billion (15.9%) and PHP215.0 billion (13.1%), respectively. Other Service Activities paid the least amount of compensation with PHP9.6 billion or 0.6 percent of the total.

The average annual compensation of PHP265,094 per paid employee decreased by 0.1 percent from PHP265,487 posted in 2015. Workers in Electricity, Gas, Steam and Air Conditioning Supply sector received the highest average annual compensation of PHP752,712 per paid employee. Information and Communication sector placed second (PHP604,990) followed by Professional, Scientific and Technical Activities (PHP501,676). (Figure 3)

Manufacturing sector emerges as top income earner

Total income earned by establishments in 2016 amounted to PHP16.0 trillion, an increase of 6.2 percent from PHP15.1 trillion total income earned in 2015.

Three sectors reached the trillion mark in terms of total income: Manufacturing, Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles, and Financial and Insurance Activities. Manufacturing, which had the highest income of PHP4.9 trillion in 2016, accounted for 30.8 percent of the total income. Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles with an earning of PHP4.1 trillion (25.3%) placed second while Financial and Insurance Activities placed third (PHP1.6 trillion or 10.0%). (Figure 4)

Meanwhile, Arts, Entertainment and Recreation sector recorded the highest growth (63.2%) in total income, increasing from PHP158.9 billion in 2015 to PHP259.3 billion in 2016.

Manufacturing sector incurs the highest expense

Total expenses incurred in 2016 amounted to PHP13.7 trillion, a 6.1 percent increment from the PHP12.9 trillion expense in 2015.

Manufacturing registered the highest expense amounting to PHP4.3 trillion or 31.5 percent of the total expenses. Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles ranked second (PHP3.9 trillion or 28.2%), followed by Financial and Insurance Activities (PHP1.0 trillion or 7.6%). (Figure 4)

Arts, Entertainment and Recreation sector, which recorded the highest increase in total income, also posted the highest increase (55.6%) in total expense, from PHP133.3 billion in 2015 to PHP207.4 billion in 2016.

Manufacturing sector reaches trillion mark in value added

Value added, an indicator that measures the value of output minus the intermediate inputs, stood at PHP5.0 trillion in 2016. It expanded by 8.9 percent from PHP4.6 trillion generated in 2015.

Manufacturing, being the lone sector hitting the trillion mark in terms of value added with PHP1.3 trillion (26.4%), contributed the highest share among sectors. Financial and Insurance Activities followed with PHP954.2 billion or 19.2 percent of the total value added. Together, these two sectors accounted for more than 40.0 percent of the total value added.  Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles ranked third with PHP426.6 billion (8.6%) while Other Service Activities contributed the least value added (PHP16.9 billion or 0.3%). (Figure 5)

Workers in Electricity, Gas, Steam and Air Conditioning Supply sector are the most labor productive

Labor productivity is the ratio of value added to total employment. At the national level, value added per worker was recorded at PHP790,454, registering a 1.3 percent increase from its 2015 value of PHP780,635.

Electricity, Gas, Steam and Air Conditioning Supply proved to be the most productive sector in 2016, with value added per worker amounting to PHP4.8 million. Real Estate Activities (PHP2.9 million) ranked next with Financial and Insurance Activities (PHP2.2 million) following behind. Workers in Other Service Activities were the least labor productive (PHP210.8 thousand).

Transportation and Storage sector receives the highest subsidy

Total subsidies received by establishments amounted to PHP39.0 billion, 10.0 percent higher than the PHP35.4 billion total subsidies granted in 2015.

The top two sectors in terms of subsidy received were Transportation and Storage (PHP9.5 billion or 24.5%) and Administrative and Support Service Activities (PHP9.2 billion or 23.6%) with a combined subsidy of almost half of the total subsidy. Financial and Insurance Activities received the next biggest share of the subsidy (PHP6.7 billion or 17.3%).  On the other hand, Construction, Accommodation and Food Service Activities, Real Estate Activities, and Other Service Activities did not receive any government subsidy in 2016.

Transportation and Storage sector leads in E–commerce sales

Sales from e-commerce transactions slumped to PHP41.3 billion in 2016 or a decrease of    7.0 percent, from PHP44.4 billion e-commerce sales in 2015.

Among sectors, Transportation and Storage recorded the largest sales through e-commerce transactions amounting to PHP28.7 billion or 69.7 percent of the total e-commerce sales. Accommodation and Food Service Activities was far second (PHP5.6 billion or 13.6%) and Arts, Entertainment and Recreation placed third (PHP2.4 billion or 5.8%).

Other sectors with sales through e-commerce transactions were as follows:

• Manufacturing 
• Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles 
• Information and Communication 
• Administrative and Support Service Activities 
• Education

(Sgd.) ROSALINDA P. BAUTISTA 
Assistant Secretary 
Deputy National Statistician 
Sectoral Statistics Office

TECHNICAL NOTES

Introduction

This Special Release presents the final economy wide results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) covering all establishments of the 18 sectors of the economy.

The 2016 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 in the year 2016.

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

The Establishment Data Management System (EDMS) was utilized in the decentralized processing of 2016 ASPBI questionnaires in the province, as well as in the online accomplishment of questionnaire through the PSA website.

Data are presented at the national level by sector based on the 2009 Philippine Standard Industrial Classification (PSIC).

Legal Authority

The conduct of 2016 ASPBI is authorized under Republic Act (RA) 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 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)

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

Thus, the 2016 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 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 in the United Nations International Recommendations on Industrial Statistics as an economic unit, under a single ownership or control, i.e. under a single legal entity, which engages in one or predominantly one kind of economic activity at a single fixed physical location.

Classification of Establishments

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

Economic Organization relates 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 that owns the establishment.  This provides the legal basis for ownership.  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 a specific date. TE refers to the total number of persons who work in or for the establishment.

Geographic Classification refers to the classification of establishments by geographic area using the Philippine Standard Geographic Code (PSGC) classification.

Methodology

Sampling Design

The 2016 ASPBI utilized stratified systematic sampling with 5-digit PSIC serving as the 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 (sub-class) of the 2009 PSIC serves as 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)

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 in TE of 20 to 99 
p          = 1, 2...18 regions (geographic domains) 
x_spj      = value of the j^th establishment in the non-certainty employment strata in TE of 20 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 in TE of 20 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 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 99for an industry domain in each region

b. Certainty Stratum (TE 100 and over)

The value 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 100 and over 
p          = 1, 2...18 regions (geographic domains) 
x_cpj      = value of the j^th establishment in the certainty employment strata in TE 100 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 100 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 (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.

For Establishments with TE of Less Than 20

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 
X_sj       = 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

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’_sj) for employment stratum in TE 1-9 or TE 10-19 was

where:

N_s        = total number of establisments in the employment stratum in TE 1-9 or TE 10-19 in the s^th industry domain

n'_s        = number of responding establishments in the employment stratum in TE 1-9 or TE 10-19 in the s^th industry domain

For the non-certainty employment stratum for the selected industry domain with TE 20-99, the adjusted weight (W'_spj) was

where:

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

Questionnaire Design

There are seven types of questionnaires used for the survey which will capture data for establishments of the 18 sectors of economy as defined in the 2009 PSIC. A clearance number and expiry date is shown at the upper right hand corner of the cover page of the questionnaire. The questionnaire is administered to the sample establishment through the establishment itself or a reporting unit. An address stub which contains information on the business name and complete address of the sample establishment is pasted in every questionnaire to guide the field staff on where to deliver the questionnaire.

A web-based version of the 2016 ASPBI questionnaires was available for accomplishment by sample establishment online at the PSA website, https://aspbi.psa.gov.ph.

Response Rate

The response rate for all establishments was 91.3 percent (27,050 out of 29,637 establishments). Included are receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out and out of scope establishments, etc.

Of the total responses, 965 establishments responded online.

Reports of the remaining non-reporting establishments were imputed based on established imputation methods and from other available administrative data sources like financial statements from Securities and Exchange Commission (SEC). However, reports of establishments in the certainty stratum, which were found to be duplicates and out of business in 2016 were not imputed.

The table below shows the response rate by sector and the number of establishments which responded online.

TABLE 1  2016 ASPBI Response Rates for All Establishments

Limitation of Data

The 2016 ASPBI covered only the formal sector of the economy.

Concepts and Definitions of Terms

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.

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.

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.

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.

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.

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

Income or Revenue refers to cash received and receivables for goods/products and by-products sold and services rendered.

Intermediate expense (for industrial sectors A, B, C, D, E and F) 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.

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.

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.

Value added is gross output less intermediate input. Gross output 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 (for industrial sectors A, B, D, E and F) 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.