Retail sale of wearing apparel, except footwear industry operates highest number of establishments

The final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) recorded a total of 115,998 establishments in the formal sector of the economy engaged in wholesale and retail trade; repair of motor vehicles and motorcycles activities.

Retail sale of wearing apparel, except footwear had the highest number of establishments with 9,231 establishments or 8.0 percent of the total for the sector. This was followed by establishments engaged in retail sale of drugs and pharmaceutical goods with 7,659 (6.6%). Establishments engaged in sale of motorcycles and their parts and components came third with 6,334 or 5.5 percent.

Figure 1 displays the percentage distribution of all establishments for the sector by industry sub-class in 2016.

Retail selling in department stores industry hires the highest number of workers

In 2016, the estimated employment of the sector was 1,114,717 workers. Of these, 1,077,257 (96.6%) were paid employees and the rest were working owners and unpaid workers.

The top five industries provided employment to more than a quarter (26.6% or 296,219 workers) of the total employment. These were the following:

• Retail selling in department stores with 68,581 (6.2%)
• Retail sale of wearing apparel, except footwear with 60,616 (5.4%)
• Retail sale of automotive fuel in specialized stores with 60,006 (5.4%)
• Retail selling in supermarkets with 55,006 (4.9%)
• Retail sale of drugs and pharmaceutical goods with 52,010 (4.7%)

The average number of workers per establishment at the national level was recorded at 10 in 2016. Retail selling in department stores recorded the highest average of 115 workers per establishment. This was followed by retail selling in hypermarkets with 111 workers per establishment. Selling by vending machine came third which posted an average of 85 workers per establishment.

Figure 2 shows the distribution of employment of the top five industries for all establishments of the sector by industry sub-class in 2016.

Total compensation reaches PHP166.0 billion

Total compensation paid by the sector reached PHP166.0 billion in 2016, translating to an average annual compensation of PHP154.1 thousand per employee.

By industry sub-class, retail selling in department stores paid the highest compensation amounting to PHP11.4 billion or 6.9 percent of the total for the sector. Wholesale of medicinal and pharmaceutical products ranked second with PHP10.0 billion or 6.0 percent, followed by retail sale of drugs and pharmaceutical goods with PHP9.0 billion or 5.4 percent. Wholesale of embroideries, on the other hand, recorded the lowest payment of PHP1.1 million.

Employees of wholesale of radio and television including parts and accessories industry are the highest paid

Employees of wholesale of radio and television including parts and accessories received the highest average annual compensation of PHP415.6 thousand per employee. On the other hand, workers employed in wholesale of embroideries received the lowest average annual compensation of PHP40.5 thousand per employee.

Figure 3 shows the distribution of average annual compensation of employees of five leading industries for all establishments of the sector by industry sub-class in 2016.

Retail selling in supermarkets industry accounts the largest income and expense

The sector generated a total income of PHP4.1 trillion and incurred a total expense of PHP3.9 trillion in 2016.

Retail selling in supermarkets earned the highest income of PHP332.1 billion (8.2%), followed by retail sale of automotive fuel in specialized stores with PHP310.1 billion (7.6%). Sale of passenger motor vehicles ranked third with PHP300.4 billion (7.4%).

Likewise, retail selling in supermarkets incurred the highest expense of PHP316.0 billion (8.1%). Retail sale of automotive fuel in specialized stores and sale of passenger motor vehicles spent PHP307.3 billion (7.9%) and PHP285.2 billion (7.4%), respectively.

On the other hand, wholesale of embroideries generated the lowest income of PHP4.5 million and lowest expense of PHP4.7 million.

Figure 4 below shows the five leading industries in terms of income and expense for all wholesale and retail trade; repair of motor vehicles and motorcycle establishments by industry sub-class in 2016.

Income per peso expense yields 1.05

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

Among industries, maintenance of motor vehicles, n.e.c and retail sale of paints, varnishes and lacquers recorded the highest income per peso expense ratio of 1.17. On the other hand, wholesale of embroideries registered the lowest income per peso expense ratio of 0.96.

Of the 176 industries, 88 generated an income per peso expense ratio of more than the national average.

Gross margin amounts to PHP667.5 billion

In 2016, the sector produced a gross margin (output or trade margin) amounting to PHP667.5 billion. The top five industries comprised more than a quarter (197.3 billion or 29.6%) of the total gross margin for the sector which was contributed by the following industries:

• Wholesale of medicinal and pharmaceutical products with PHP51.3 billion (7.7%)
• Retail selling in supermarkets with PHP45.1 billion (6.7%)
• Retail selling in department stores with PHP41.6 billion, (6.2%)
• Retail sale of wearing apparel, except footwear with PHP30.4 billion (4.5%)
• Retail sale of household appliances, articles and equipment with PHP29.0 billion (4.3%)

Figure 5 shows the distribution of gross margin of the top five industries for all establishments of the sector by industry sub-class in 2016.

Value added registers at PHP426.6 billion

The sector yielded an estimated value added of PHP426.6 billion in 2016. The top five industries contributed more than a quarter (124.3 billion or 29.1%) to the total value added for the sector and these were the following:

• Retail selling in supermarkets with PHP29.1 billion (6.8%)
• Wholesale of medicinal and pharmaceutical products with PHP27.9 billion (6.5%)
• Sale of passenger motor vehicles with PHP25.9 billion, (6.1%)
• Retail selling in department stores with PHP25.2 billion (5.9%)
• Retail sale of automotive fuel in specialized stores with PHP16.2 billion (3.8%)

Sale of motor vehicles industry records the highest labor productivity

Value added per employment, a measure of labor productivity, for the sector was computed at PHP382.7 thousand per worker. Wholesale of solid, liquid and gaseous fuels and related products recorded the highest labor productivity among industries with PHP1,726.4 thousand per worker while wholesale of embroideries registered the lowest, PHP34.5 thousand per worker.

Figure 6 shows the labor productivity of the five leading industries for all establishments of the sector by industry sub-class in 2016.

Gross additions to tangible fixed assets amounts to PHP26.3 billion

The total gross additions to tangible fixed assets (capital expenditures less sale of tangible fixed assets) acquired by the sector in 2016 was valued at PHP26.3 billion. Retail selling in department stores with PHP3.3 billion (12.7%) amassed the highest acquisition of fixed assets while retail sale of made-up textile goods recorded the least gross additions to fixed assets, amounting to PHP35.0 thousand (0.0001%).

Total change in inventories build up to PHP39.6 billion

Total change in inventories (defined as ending less beginning inventory) for the sector amounted to PHP39.6 billion in 2016. Among industries, retail selling in department stores recorded the highest change in inventories of PHP7.6 billion (19.2%). Retail selling in supermarkets and wholesale of rice, corn and other cereals followed with total change in inventories of PHP5.0 billion (12.6%) and PHP3.9 billion (9.7%), respectively.

Government grants PHP802.0 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 PHP802.0 million in 2016.

Of the 174 industries, only five received subsidies from the government. Wholesale of rice, corn and other cereals received the highest share of grants amounting to PHP685.0 million (85.4%).

Sales from e-commerce reaches PHP2.0 billion

E-commerce transactions recorded for the sector amounted to PHP2.0 billion in 2016. Among industries, nine posted e-commerce transactions of which four of these industries made over a hundred million e-commerce sales, namely:

• Retail sale of home furnishing, furniture and fixtures, including lamps and lamp shades with PHP756.0 million (37.2%)
• Retail sale via internet with PHP577.2 million (28.4%)
• Retail selling in non-specialized stores, n.e.c. with PHP367.1 million (18.1%)
• Retail sale of computer peripheral equipment with PHP179.6 million (8.8%)

TECHNICAL NOTES

Introduction

This Special Release presents the final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for all Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles establishments (sector G).

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 in 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.

Legal Authority

The conduct of the 2016 ASPBI is authorized under Republic Act 10625 known as the Philippine Statistical Act of 2013, which mandates reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.

Scope and Coverage

The 2016 ASPBI covered establishments engaged in 18 economic sectors classified under the 2009 PSIC, namely:  

• Agriculture, Forestry and Fishing (A)
• Mining and Quarrying (B)
• Manufacturing (C)
• Electricity, Gas, Steam, and Air Conditioning Supply (D)
• Water Supply; Sewerage, Waste Management and Remediation Activities (E)
• Construction (F)
• Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (G)
• Transportation and Storage (H)
• Accommodation and Food Service Activities (I)
• Information and Communication (J)
• Financial and Insurance Activities (K)
• Real Estate Activities (L)
• Professional, Scientific and Technical Activities (M)
• Administrative and Support Service Activities (N)
• Education (P)
• Human Health and Social Work Activities (Q)
• Arts, Entertainment and Recreation (R)
• Other Service Activities (S)

The survey was confined to the formal sector of the economy, which consists of the following:  

•  Corporations and partnerships
•  Cooperatives and foundations
•  Single proprietorship with employment of 10 and over
•  Single proprietorship with branches

Hence, the 2016 ASPBI covered only the following economic units:

• All establishments with total employment (TE) of 10 or more, and;
• All establishments with TE of less than 10, except those establishments with Legal Organization = 1 (single proprietorship) and Economic Organization = 1 (single establishment), that are engaged in economic activities classified according to the 2009 Philippine Standard Industrial Classification (PSIC).

Frame of Establishments

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

Sampling Design

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 s^th industry domain is

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 in TE of less than 20 in s^th industry domain

 

 

   N_s = total number of establishments in the non-certainty employment stratum in TE of less than 20 in 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

 

b.  Certainty Stratum

       The total of a characteristic (X_c ) for the certainty employment stratum in the C^th industry domain was

where:

       c = denotes the certainty employment strata in TE of less than 20 in the c^th industry       

   X_cj = value of the j^th establishment in the certainty employment strata in TE of less than 20 in the c^th industry domain

       j = 1,2,3,..., m_c establishments                                                 

  m_c = number of establishments in the certainty employment strata in TE of less than 20 in the c^th 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,

 

where:

      s = denotes the non-certainty employment strata in TE of 20 and over       

      p = 1, 2,..., 18 regions (geographic domains)        

   X_spj = 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,..., n_sp establishments                                                 

  W_spj = weight of the j^th establishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region                                                                                                                                                                                      

   N_sp = total number of establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region

    n_sp = 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)

       The estimate 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 of 20 and over        

       p = 1,2,...18 regions (geographic domains)

   X_cpj = value of the j^th establishment in the certainty employment strata in TE of 20 and over for 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 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

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 all sample establishments under Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles sector was 90.46 percent (6,250 out of 6,909 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, 240 establishments responded online.

Reports of the remaining non-reporting establishments were taken from financial statements from Securities and Exchange Commission (SEC) and other available data sources. Reports of establishments which were found to be out-of-scope and duplicate of another establishments were not included in the generation of statistical tables.

Limitation of Data

The survey covered 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  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.

Gross margin is the difference between the value of goods sold on own account (including commission received on sale on account of others) during the inquiry period and the gross cost of these goods. The gross cost of goods is the value of purchases of goods intended for sale adjusted for stock change of these goods during the inquiry period.

Value added  is gross output less intermediate input. Gross output for Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles 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.