Retail sale in non-specialized stores industry operates the most number of establishments

The preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) recorded a total of 8,589 establishments with total employment (TE) of 20 and over and engaged in Wholesale and Retail trade; Repair of Motor Vehicles and Motorcycles.

Among industries, retail sale in non-specialized stores reported the highest number of establishments with 1,585 or 18.5 percent of the total number of establishments for the sector. Retail sale of other household equipment in specialized stores ranked second with 1,167 establishments or 13.6 percent and establishments engaged in retail sale of other goods in specialized stores came in third with 1,088 establishments or 12.7 percent. Figure 1 presents the percentage distribution of establishments of the sector for establishments with TE of 20 and over by industry group in 2016.

The regional distribution of establishments for the sector showed that those with TE of 20 and over were mostly concentrated in the National Capital Region (NCR) with 3,593 establishments (41.8%). This was followed by its neighboring region, CALABARZON with 914 establishments (10.6%). Central Visayas placed third with 659 establishments (7.7%). Autonomous Region of Muslim Mindanao (ARMM) had the least number with only nine establishments (0.1%).

Retail sale in non-specialized stores industry employs the highest

The sector comprised an estimated total employment of 501,695 workers. Paid workers numbered 499,813 (99.6%) while the rest were working owners and unpaid workers.

The combined employment of retail sale in non-specialized stores with 141,443 workers (28.2%); wholesale of household goods with 61,973 workers (12.4%); and retail sale of other household equipment in specialized stores with 46,561 workers (9.3%) provided employment to almost half (249,977 workers or 49.8%) of the total employment for the sector. Figure 2 represents the distribution of employment of the sector for establishments with TE of 20 and over by industry group in 2016.

Among regions, NCR topped the employment list with 237,655 workers or 47.4 percent, followed by CALABARZON with 42,472 employees or 8.5 percent. Central Visayas with 38,905 workers or 7.8 percent, came in with a small margin. On the other hand, ARMM recorded the least number of workers with 323 (0.1%).

The average number of workers per establishment for the sector was posted at 58. Retail sale in non-specialized stores had the highest average of 89 workers per establishment. This was followed by sale of motor vehicles with 83 workers per establishment and wholesale of household goods with 72 workers per establishment. Maintenance and repair of motor vehicles was lowest at an average of 32 workers per establishment.

Total compensation levels up to PHP97.8 billion

The total compensation of Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles sector was PHP97.8 billion in 2016, equivalent to an average annual compensation of PHP195.6 thousand per employee.

By industry group, retail sale in non-specialized stores paid out the highest compensation amounting to PHP21.2 billion or 21.7 percent of the total. Wholesale of household goods ranked second with PHP18.5 billion or 19.0 percent. Third in place was wholesale of machinery, equipment and supplies with PHP9.7 billion (10.0%). Non-specialized wholesale trade made the lowest payments for compensation with PHP192.3 million (0.2%).

The regions with the highest employment consequently received the highest compensation. Of these regions, NCR was the lead with a total compensation of PHP61.1 billion (62.5%). This was followed by CALABARZON with PHP8.0 billion (8.2%) and Central Visayas with PHP5.7 billion (5.8%). ARMM received the lowest compensation of PHP25.9 million (0.03%) in 2016.

Wholesale of household goods bagged the highest average annual compensation of PHP299.2 thousand per employee. On the other hand, retail sale of automotive fuel in specialized stores received the lowest average annual compensation of PHP95.7 thousand per employee. Figure 3 shows the average annual compensation of employees for the top five leading industries of the sector for establishments with TE of 20 and over by industry group in 2016.

At the regional level, NCR registered the highest average annual compensation in the amount of PHP257.3 thousand per employee while ARMM recorded the lowest average annual compensation of PHP80.3 thousand per employee.

Retail sale in non-specialized stores industry accounts the largest income and expense

The sector generated a total income of PHP2.9 trillion and incurred a total expense of PHP2.7 trillion in 2016.

Retail sale in non-specialized stores earned the highest income of PHP634.9 billion (22.2%) and incurred the largest expense of PHP608.3 billion (22.3%). This was followed by wholesale of household goods with PHP461.6 billion returns (16.1%) and expense of PHP 435.7 billion (16.0%). Sale of motor vehicles ranked third with PHP336.5 billion proceeds (11.8%) and PHP319.2 billion expense (11.7%).

On the other hand, retail trade not in stores, stalls or markets earned the lowest income amounting to PHP3.1 billion and incurred the lowest expense worth PHP3.0 billion. Figure 4 shows the top five industry groups of the sector for establishments with TE of 20 and over by industry group in 2016.

Among regions, NCR earned the highest income which was more than half (56.1%) of the total income of the sector or PHP1.6 trillion and incurred the highest expense of PHP1.5 trillion or (55.8%). This was followed by CALABARZON with PHP290.0 billion income (10.1%) and PHP278.6 billion expense (10.2%), and Central Luzon with PHP179.6 billion income (6.3%) and PHP172.6 billion expense (6.3%).

Income-expense ratio yields a 1.05 turnover

A ratio of 1.05 income per peso expense was generated by the sector in 2016.

Among industries, maintenance and repair of motor vehicles recorded the highest income per expense ratio of 1.24 which exceeded the national average. Retail sale of cultural and recreation goods in specialized stores and retail sale of information and communications equipment in specialized stores followed with income-expense ratio of 1.10 and 1.09, respectively.

At the regional level, Central Visayas CARAGA and NCR each posted an income per expense ratio of 1.06, which is above the national average.

Gross margin amounts to PHP449.4 billion

The sector produced a gross margin (output or trade margin) amounting to PHP449.4 billion in 2016. The top three industry groups that contributed more than half (53.2%) to the total gross margin of the sector were:

• Wholesale of household goods, PHP97.2 billion (21.6%),
• Retail sale in non-specialized stores, PHP97.1 billion (21.6%)
• Retail sale of other household equipment in specialized stores, PHP44.8 billion, (10.0%)

Figure 5 shows the distribution of top five industries to gross margin of the sector for establishments with TE 20 and over by industry group in 2016.

At the regional level, the top four grosser in terms of gross margin were NCR with 284.2 billion (63.2%), CALABARZON with PHP37.6 billion (8.4%), Central Visayas with PHP26.2 billion (5.8%) and Central Luzon with PHP22.9 billion (5.1%).

Value added amounts up to PHP287.6 billion

The Value added generated by Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles sector was estimated at PHP287.6 billion in 2016.

Three industries that contributed almost half (48.6%) to the total value added of the sector were retail sale in non-specialized stores with PHP59.0 (20.5%), wholesale of household goods with PHP51.6 billion (17.9%) and sale of motor vehicles with PHP29.1 billion (10.1%).

At the regional level, NCR contributed the largest value added worth PHP176.1 billion (61.2%).

Sale of motor vehicles industry records the highest labor productivity

Value added per worker, a measure of labor productivity, was estimated at PHP573.3 thousand per worker. Sale of motor vehicles recorded the highest labor productivity among industries with PHP1,006.1 thousand per worker while non-specialized wholesale trade generates the lowest labor productivity with PHP273.8 thousand per worker.

Among regions, NCR emerged as most labor productive with labor productivity of PHP740.8 thousand per worker. Figure 6 shows the distribution of value added per worker for the five leading industries of the sector for establishments with TE 20 and over in 2016.

Gross additions to fixed assets accumulates to PHP18.9 billion

The gross additions to tangible fixed assets (capital expenditures less sale of fixed assets) of the sector in 2016 was valued at PHP18.9 billion. Retail sale in non-specialized stores amassed the biggest acquisition of fixed assets with PHP4.8 billion (25.2%) while retail trade not in stores, stalls or markets had the least gross additions to fixed assets with PHP3.3 million (0.02%).

Among regions, NCR recorded the highest additions to fixed assets amounting to PHP11.2 billion (59.1%). ARMM had no recorded gross additions to fixed assets.

Total change in inventories amounts to PHP31.0 billion

Total change in inventories (defined as ending less beginning inventory) for the sector amounted to PHP31.0 billion in 2016.

By industry, retail sale in non-specialized stores had the highest stocks amounting to PHP11.4 billion or 36.7 percent of the total. Wholesale of food, beverages and tobacco; and wholesale of household goods followed with PHP6.9 billion (22.1%) and PHP3.9 billion (12.6%) change in inventories, respectively.

Among regions, NCR had the highest share in change in inventories with PHP16.2 billion (52.2%) while Eastern Visayas recorded the lowest change in inventories with PHP96.7 million (0.3%).

Government grants PHP692.6 million subsidies

Subsidies are special grants received from the government in the form of financial assistance or tax exemption or tax privilege to aid and develop an industry. Total subsidies received from the government amounted to PHP692.6 million in 2016.

Only two industries were provided subsidy from the government in 2016. These were wholesale of food, beverages and tobacco; and wholesale of agricultural raw materials and live animals, receiving an amount of PHP685.0 million and PHP7.6 million subsidies, respectively.

By region, Central Visayas captured the biggest amount of subsidy from the government amounting to PHP195.9 million (28.3%). Came in next were SOCCSKSARGEN with PHP139.0 million (20.1%) worth of subsidy and Zamboanga Peninsula receiving PHP101.6 million (14.7%) subsidy from the government.

Sales from e-commerce reaches PHP2.1 billion

Transactions from e-commerce (sales) for the sector in 2016 amounted to PHP2.1 billion.

Among industries, seven posted e-commerce transactions and four of these made orders with over a hundred million pesos namely:

• Retail sale of other household equipment in specialized stores with PHP756.0 million (36.7%)
• Retail trade not in stores, stalls or markets with PHP577.2 million (28.0%)
• Retail sale in non-specialized stores with PHP367.1 million (17.8%)
• Wholesale of household goods with PHP344.0 million (16.7%)

Among regions only NCR registered e-commerce transactions in 2016 amounting to PHP2,051.4 billion.

TECHNICAL NOTES

Introduction

This Special Release presents the preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycle sector for establishments with total employment (TE) 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 province as well as the online accomplishment of questionnaire through the PSA website.

Data are presented by industry group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC) at the national and regional level.

Legal Authority

The conduct of the 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 (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 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 December 31, 2016 was used for the 2016 ASPBI.

Sampling Design

2016 ASPBI uses 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 Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycle sector for establishments with TE of 20 and over was 87.8 percent (3,898 out of 4,438 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, 190 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 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 Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycle 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 (less rent expense for land); goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee and other expense.