Other financial service activities, except insurance and pension funding industry leads the sector in terms of number of establishments
Preliminary results of the 2016 Annual Survey of Philippine Business and Industry showed that a total of 1,376 establishments with total employment (TE) of 20 and over in the formal sector of the economy were engaged in financial and insurance activities.
Among industry groups, other financial service activities, except insurance and pension funding activities recorded the highest number of establishments comprising 715 or 52.0 percent of the total. Establishments engaged in monetary intermediation followed with 356 (25.9%). Ranked third were establishments engaged in insurance with 90 (6.5%).
Figure 1 shows the distribution of establishments with TE of 20 and over for Financial and Insurance Activities by industry group in 2016.
At the regional level, the National Capital Region (NCR) accounted for the most number of establishments with 562 or 40.8 percent of the total. CALABARZON and Central Luzon placed far second and third with 151 (11.0%) and 118 establishments (8.6%), respectively. ARMM had the least in number with only seven establishments.
Monetary intermediation industry employs the highest number of workers
The sector employed a total of 326,602 workers in 2016. Of the total, 99.8 percent were paid employees and the rest were working owners or unpaid workers.
Monetary intermediation employed more than half of the total number of workers (171.6 thousand or 52.6%). Other financial service activities, except insurance and pension funding activities placed second with 106,986 workers (32.8%). Ranked far third was insurance with 20,950 workers or 6.4 percent.
Figure 2 displays the distribution of employment of Financial and Insurance establishments with TE of 20 and over by industry group in 2016.
Region-wise, NCR recorded the biggest share in employment comprising more than seventy percent of the total workforce or 231,223 workers. CALABARZON placed far second with 19,573 workers (6.0%), followed by Central Visayas with 13,807 workers (4.2%). ARMM registered the least number of workers with 338 workers.
The average number of workers was measured at 237 workers per establishment. Monetary intermediation surpassed the national average with 482 workers per establishment. The lowest was reported by establishments in trusts, funds and other financial vehicles with 58 workers per establishment.
Employees in trusts, funds and other financial vehicles industry are the highest paid
In 2016, the sector paid a total compensation of PHP204.1 billion, equivalent to an average annual compensation of PHP625.9 thousand per employee.
Industry-wise, monetary intermediation paid the highest compensation of PHP131.9 billion or 64.6 percent of the total for the sector. Other financial service activities, except insurance and pension funding activities placed a far second with PHP28.0 billion or 13.7 percent. Insurance ranked third with PHP21.3 billion or 10.5 percent. On the other hand, pension funding recorded the lowest amount of PHP132.9 million (0.1%).
Among regions, NCR spent the biggest share in total compensation amounting to PHP182.5 billion (89.4%). CALABARZON and Central Visayas were in second and third place with PHP4.5 billion (2.2%) and PHP3.7 billion (1.8%), respectively.
Employees in trusts, funds and other financial vehicles were the highest-paid employees receiving an average annual compensation of PHP2.0 million per annum, surpassing the sector’s average of PHP625.9 thousand per annum. Employees of holding companies and insurance followed with average annual compensation of PHP1.3 million and PHP1.0 million, respectively. However, those employed in other financial service activities, except insurance and pension funding activities were paid only PHP262.7 thousand per annum.
Figure 3 illustrates the average annual compensation of employees of Financial and Insurance establishments with TE 20 and over by industry groups in 2016.
Employees working in NCR received the highest average annual compensation of PHP789.4 thousand while those employed in ARMM received the lowest, PHP38.7 thousand per annum.
Monetary intermediation activities industry contributes the biggest share in income and expense
Gross income realized by the sector reached PHP1.5 trillion in 2016. Monetary intermediation had the biggest share of PHP705.8 billion or 48.2 percent of the total income for the sector. Insurance ranked second with income amounting to PHP256.2 billion (17.5%). Activities of holding companies ranked third with PHP184.8 billion (12.6%).
On the other hand, total expense incurred by the sector amounted to PHP984.9 billion in 2016. Being the major contributors in income, monetary intermediation and insurance also had the highest proportion of expenses worth PHP505.4 billion (51.3%) and PHP200.3 billion (20.3%), respectively. Pension funding incurred the lowest expense of PHP454.0 million (0.05%).
Figure 4 shows the top five industry groups in terms of income and expense of the sector.
At the regional level, NCR had the highest share in income and expense. It earned PHP1.3 trillion or 92.2 percent of the total income and incurred PHP919.2 billion or 93.3 percent of the total expense. This was followed by Central Visayas with PHP50.8 billion income (3.5%) and PHP14.3 billion expense (1.5%) and CALABARZON with PHP16.2 billion income (1.1%) and PHP12.9 billion in expense (1.3%). ARMM contributed the least income of PHP28.1 million (0.002%) and PHP23.9 million expense (0.002%).
Income per peso expense stands at 1.49
Income per peso expense stood at 1.49 in 2016. Activities of holding companies recorded more than twice the national average with income per peso expense of 3.19. Pension funding and trusts, funds and other financial vehicles surpassed the national average for the sector which reported 2.03 and 2.01 income per peso expense, respectively.
Value added amounts to PHP860.4 billion
Value added realized by Financial and Insurance Activities sector totaled PHP860.4 billion in 2016. Industry-wise, monetary intermediation registered the highest value added with PHP420.9 billion (48.9%). Activities of holding companies was next with PHP163.1 billion (19.0%). Other financial service activities, except insurance and pension funding activities ranked third with PHP108.1 billion (12.6%). On the other hand, pension funding recorded the least value added of PHP476.3 million (0.1%).
Across regions, NCR reported the highest value added, amounting to PHP778.6 billion (90.5%). Central Visayas and CALABARZON came in far second and third with PHP43.5 billion (5.1%) and PHP9.5 billion (1.1%), respectively. ARMM had the least value added of only PHP19.3 million (0.002%).
Activities of holding companies industry has the highest labor productivity
Value added per worker, a measure of labor productivity, was estimated at PHP2.6 million per worker in 2016. Activities of holding companies led the sector with labor productivity of PHP27.9 million per worker. Ranked second was trusts, funds and other financial vehicles with PHP13.4 million. On third place was the combined industries of activities auxiliary to insurance and pension funding and fund management activities with PHP4.3 million. On the other hand, activities auxiliary to financial service, except insurance and pension funding reported the lowest labor productivity with PHP954.6 thousand per worker.
At the regional level, highest labor productivity was reported in NCR with PHP3.4 million per worker. Central Visayas followed with labor productivity amounting to PHP3.2 million per worker. Ranked third was Northern Mindanao which recorded labor productivity of PHP575.2 thousand per worker.
Figure 5 indicates the labor productivity of the top five industry groups in Financial and Insurance sector with TE of 20 and over in 2016.
At the regional level, NCR had the highest labor productivity with PHP390.3 thousand per worker. Cordillera Administrative Region (CAR) came next with PHP308.4 thousand per worker. Meanwhile, least labor productivity amounting to PHP69.7 thousand per worker was recorded in SOCCSKSARGEN.
Gross additions to tangible fixed assets reaches PHP12.4 billion
Gross additions to tangible fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP12.4 billion in 2016.
Monetary intermediation activities acquired the highest gross additions to fixed assets amounting to PHP9.0 billion (72.9%). This was followed by other financial service activities, except insurance and pension funding activities with PHP2.2 billion (17.6%) gross additions to fixed assets. Activities of holding companies ranked third with PHP984.0 million (7.9%).
Among regions, NCR reported the highest gross additions to fixed assets comprising 68.1 percent or PHP8.4 billion. All regions except ARMM acquired tangible fixed assets during the period.
Activities auxiliary to financial service, except insurance and pension funding industry records the highest change in inventories
Total change in inventories (ending less beginning inventory) yielded a negative change in inventories in 2016. Activities auxiliary to financial service, except insurance and pension funding reported the highest value of change in inventories worth PHP2.7 million. Trusts, funds and other financial vehicles came next with PHP1.8 million. Pension funding registered PHP135 thousand change in inventories.
Region-wise, Davao Region reported the highest change in inventories amounting to PHP24.1 million. Closely behind was Negros Island Region with PHP24.0 million. Other regions with positive value of change in inventories were Ilocos Region, Central Luzon, Zamboanga Peninsula and Northern Mindanao.
Total subsidies amounts to PHP6.7 billion
Subsidies are 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 subsidies received by the sector from the government amounted to PHP6.7 billion in 2016.
Only two industry groups received subsidies from the government. These were the following:
- Monetary intermediation, PHP5.9 billion; and
- Other financial service activities, except insurance and pension funding activities, PHP814.0 million.
At the regional level, only four of the regions were recipient of subsidies from the government. NCR received the highest subsidy of PHP6.7 billion. Ranked far second was Central Luzon which received PHP11.0 million subsidy. Zamboanga Peninsula with subsidy of PHP4.2 million ranked third. The least subsidy was received by Ilocos Region with PHP918 thousand.
This Special Release presents the preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for Financial and Insurance Activities sector for establishments with total employment of 20 and over.
The 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 2016 as the reference period, except for employment data which is as of 15 November 2016.
Establishment Data Management System (EDMS) was utilized in the decentralized processing of survey questionnaires in the provinces as well as the online accomplishment of questionnaires through the PSA website.
Data are presented by industry group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC) at the national and regional levels.
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 partnership
- 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 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 PSA Resolution No. 01 Series of 2017-158 signed on 14 February 2017 was utilized to classify economic units according to their economic activities.
Size of an establishment is determined by its TE as of specific date. 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 31 December 2016 was used for the 2016 ASPBI.
Selection of sample establishments for the 2016 ASPBI was done using stratified systematic sampling with 5-digit PSIC serving as industry strata and employment size as the second stratification variable.
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,
s = denotes the non-certainty employment strata in TE of 20 and over
p = 1, 2,..., 18 regions (geographic domains)
Xspj = value of the jthestablishment in the non-certainty employment strata with TE of 20 and over for an industry domain in each region
j = 1,2,3,..., nsp establishments
Wspj = weight of the jth establishment in the non-certainty employment strata with TE of 20 and over for an industry domain in each region
Nsp = total number of establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
nsp = 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, D and J, ICT core industries, Business Process Management (BPM) industries, Government Owned and Controlled Corporation (GOCCs) and with TE 100 and over)
c = denotes the certainty employment strata in TE of 20 and over
p = 1,2,...18 regions (geographic domains)
Xcpj = value of the jthestablishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
j = 1,2,3,..., mcp establishments
mcp = 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 estimates for all employment strata (non-certainty and certainty) in the same industry domain,
where d denotes the industry domain and p denotes the region
National level estimate of the the characteristics by industry domain are 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 (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
Nsp = 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 for Financial and Insurance Activities sector for establishments with TE of 20 and over was 81.4 percent (806 out of 990 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, 54 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
The survey covers only the formal sector of the economy.
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 15 November 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. Computation of gross output for financial and insurance activities sector varies per industry as presented below:
For PSIC K641, K649 is equal to the sum of net interest income (interest income – interest expense); value of industrial services done for others; value of non-industrial services done for others less rent income from land; service charges; dividend income; commission and fees earned; foreign exchange gains; other income; capital expenditures produced on own account.
For PSIC K651, K652, K6623 is equal to the sum of net premiums earned (insurance premium- insurance claims paid); value of industrial services done for others; value of non-industrial services done for others less rent income from land; dividend income; commission and fees earned; other income; capital expenditures produced on own account.
For PSIC 66130 is equal to the sum of foreign exchange gains; value of industrial services done for others; value of non-industrial services done for others less rent income from land; commission and fees earned; other income; capital expenditures produced on own account.
For PSIC K642 is equal to the sum of dividend income; value of industrial services done for others; value of non-industrial services done for other less rent income from land; commission and fees earned; other income; capital expenditures produced on own account.
For PSIC K643,K66210, K66220, K66290, K66300, K661 except K66130 is equal to the sum of commission and fees earned; value of non-industrial services done for others; other income; capital expenditures produced on own account.
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; research and development expense; environmental protection expense; royalty fee; franchise fee; foreign exchange losses and other expense.
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 refers 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.
See more at the Annual Survey of Philippine Business and Industry (ASPBI) page.