Credit cooperative industry dominates the sector in terms of number of establishments
The final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) showed that a total of 7,416 establishments in the formal sector of the economy were engaged in financial and insurance activities.
Credit cooperative activities covered 2,351 establishments or 31.7 percent of the total number of establishments. Lending investor activities followed with 1,305 establishments or 17.6 percent. Ranked third was pawnshop operations with 1,292 establishments (17.4%).
Figure 1 shows the distribution of establishments for all establishments of the sector by industry sub-class in 2016.
Expanded commercial banking (universal banking) industry hires the highest number of workers
The sector hired a total of 443,617 workers in 2016. Of the total, 441,665 (99.6%) were paid employees and the rest were working owners or unpaid workers.
Expanded commercial banking (universal banking), employed more than a fifth of the total number of workers (101,383 or 22.9%). Lending investor activities placed second with 95,390 workers (21.5%). Ranked far third was credit cooperative activities with 37,774 employees or 8.5 percent.
Figure 2 displays the distribution of employment for all establishments of the sector by industry sub-class in 2016.
In 2016, the sector posted an average employment of 60 workers per establishment. Expanded commercial banking (universal banking) registered the highest average with 5,336 workers per establishment. Specialized government banking was also on the thousand mark with 3,452 workers per establishment. Far third was regular commercial banking with 543 workers per establishment. Foreign exchange dealing reported the least average workers per establishment of 5.
Employees of Securities dealership, own account industry are the highest-paid
In 2016, the sector paid a total compensation of PHP215.0 billion, translating to an average annual compensation of PHP486.8 thousand per employee.
Industry-wise, expanded commercial banking (universal banking) paid the highest compensation of PHP88.8 billion (41.3%). Life insurance placed a far second with PHP15.0 billion or 7.0 percent of the total. Regular commercial banking ranked third with PHP11.8 billion or 5.5 percent. On the other hand, pre need plan for education recorded the compensation paid to employees of PHP3.5 million (0.002%).
Employees in security dealership, own account activities were the highest-paid, receiving an average compensation of PHP2.6 million per annum, surpassing the sector’s average of PHP486.8 thousand per annum. However, those employed in lending investor activities were paid only PHP41.7 thousand per annum.
Figure 3 illustrates the average compensation of employees for the top five industries for all establishments of the sector by industry sub-class in 2016.
Expanded commercial banking (universal banking) activities industry contributes the biggest share in income and expense
The gross income realized by the sector reached PHP1.6 trillion in 2016. Expanded commercial banking (universal banking) had the highest share with income of PHP477.7 billion or 29.9 percent of the total. Activities of holding companies followed with PHP269.7 billion (16.9%). Life insurance ranked third with PHP202.0 billion (12.6%).
Total expense incurred amounted to PHP1.05 trillion in 2016. Being the major contributor in income, expanded commercial banking (universal banking), also had the highest proportion in expense with PHP326.5 billion (31.2%). Ranked second in terms of expense was life insurance with PhP153.9 billion or 14.7 percent of the total. In third place was activities of holding companies, with expense amounting to PHP76.7 billion or 7.3 percent. However, other activities auxiliary to insurance and pension funding incurred the lowest expense of PHP198.4 million (0.02%).
Figure 4 presents the income and expense for the top five industries for all establishments of the sector by industry sub-class in 2016.
Income per peso expense stands at 1.52
The sector generated an income per peso expense ratio of 1.52. This means that for every peso spent, a corresponding income of PHP1.52 was generated.
Across industries, activities of holding companies recorded the highest income per peso expense of 3.52 while other activities auxiliary to financial service activities recorded the least with 0.95.
Value added amounts to PHP954.2 billion
Value added realized by the sector totalled PHP954.2 billion in 2016.
Industry-wise, expanded commercial banking (universal banking) registered the highest value added with PHP299.5 billion (31.4%). Activities of holding companies ranked second with PHP235.9 billion (24.7%); and life insurance ranked third with PHP66.7 billion (7.0%). On the other hand, stock savings and loan activities recorded the least with value added of PHP137.1 million (0.01%).
Activities of holding companies has the highest labor productivity
Value added per employee, a measure of labor productivity, was estimated at PHP2.2 million per worker in 2016. Activities of holding companies led the sector with labor productivity of PHP35.6 million per worker. Ranked second was investment company operation with PHP30.2 million per worker. On third place was trust and investment management corporation operation with PHP10.2 million.
Figure 5 exhibits the labor productivity of the top five industries.
Gross additions to tangible fixed assets reaches PHP14.7 billion
Gross additions to tangible fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP14.7 billion in 2016.
Credit cooperative activities acquired the highest gross additions to tangible fixed assets with PHP3.0 billion (20.3%). This was followed by expanded commercial banking (universal banking) with PHP2.7 billion (18.6%). Regular rural banking came third with PHP2.5 billion (17.3%).
Regular rural banking records the highest change in inventories
Total change in inventories (ending less beginning inventory) registered a total of negative PHP368.0 million in 2016.
Among industries, regular rural banking recorded the highest change in inventories amounting to PHP32.0 million. Credit cooperative activities followed with PHP21.7 million. Lending investor was third with PHP16.0 million. Other industries which recorded more than a million pesos change in inventories were the following;
- Expanded commercial banking (universal banking), PHP4.6 million,
- Mutual benefit and loan association, PHP3.6 million,
- Other activities auxiliary to financial service activities, PHP2.7 million and,
- Investment house operation, PHP1.8 million.
Total subsidies received from the government 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 six industries received subsidies from the government and these were;
- Specialized government banking, PHP5.8 billion
- Financing company operations, PHP750.0 million
- Banking activities, n.e.c., PHP101.9 million
- Lending investor activities, PHP31.6 million
- Credit cooperative activities, PHP17.2million
- Pawnshop operations, PHP15.2 million
This Special Release presents the final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for all Financial and Insurance Activities establishments (sector K).
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 the year 2016 as the reference period, except for employment data which is 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 questionnaire through the PSA website.
Data are presented by industry-class or 5-digit 2009 Philippine Standard Industrial Classification (PSIC) at the national level.
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 frame of the survey. 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. 1 Series 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.
The 2016 ASPBI uses a stratified systematic sampling with 5-digit PSIC serving as industry strata and employment size as the second stratification variable. The selection of sample establishments is done independently by stratum using systematic sampling.
Estimation Procedure for Establishments with TE of Less Than 20.
a. Non-Certainty Stratum
The estimate of the total of a characteristic for the non-certainty employment stratum TE less than 20 in the sth industry domain is
s = denotes the non-certainty employment strata in TE of less than 20
Xsj = value of the jth establishment in non-certainty employment stratum in TE of less than 20 in Sth industry domain
j = 1,2,3,..., ns establishments
Wsj = weight of the jth establishment in the non-certainty employment stratum in TE of less than 20 in sth industry domain
Ns = total number of establishments in the non-certainty employment stratum in TE of less than 20 in sth industry domain
ns = number of sample establishments in the non-certainty employment stratum in TE of less than 20 in sth domain
b. Certainty Stratum
c = denotes the certainty employment strata in TE of less than 20 in the cth industry
Xcj = value of the jth establishment in the certainty employment strata in TE of less than 20 in the cth industry domain
j = 1,2,3,..., mc establishments
mc = number of establishments in the certainty employment strata in TE of less than 20 in the cth industry domain
c. Total Estimate for TE of Less Than 20
For all sections except B and C, national level estimates of the total of a characteristic for the industry domain is obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain. That is,
where d denotes the industry domain.
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 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 in 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 in 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 for an industry domain in each region
b. Certainty Stratum (Establishments under the following: Section B and D, ICT core industries except J61902, Business Process Management (BPM) industries, Government Owned and Controlled Corporations (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 jth establishment in the certainty employment strata in TE of 20 and over for an industry domain within 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) is obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,
where d denotes the industry domains and p refers to region
National level estimate of the characteristic 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, and (n/n') was multipled 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
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 all establishments was 81.4 percent (1,210 out of 1,445 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 data sources and financial statements from Securities and Exchange Commission (SEC). and other available data sources. However, there were establishments which were found to be duplicates of another establishments and out-of-scope were not incleded in the generation of statistical tables.
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 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 is 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 is 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 is 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 are 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.