Number of manufacturing establishments drops by 13.6 percent

The final results of the Annual Survey of Philippine Business and Industry (ASPBI) showed a total of 24,200 manufacturing establishments in 2017. This represents a 13.6 percent decrease from the 28,003 manufacturing establishments recorded in 2016. (Table A)

Among industry groups, manufacture of other food products accounts for 7,880 establishments or 32.6 percent of the total. Manufacture of beverages followed with 2,407 (9.9%) establishments. Printing and service activities related to printing ranked third with 1,581 (6.5%) establishments. (Figure 1)

Manufacture of electronic components employs the most number of workers

Total employment generated by manufacturing establishments reached 1.3 million in 2017, a 0.1 percent increase from the total employment posted in 2016. (Table A)

Manufacture of electronic components employed the highest number of workers with 153.2 thousand or 12.0 percent of the total employment. This was followed by manufacture of other food products with 146.7 thousand (11.5%) workers and manufacture of wearing apparel, except fur apparel with 110.6 thousand (8.7%) workers. (Figure 2 and Table 1)

Total compensation rises by 4.9 percent

Total compensation paid by manufacturing establishments amounted to PhP370.7 billion, a 4.9 percent increase from the PhP353.6 billion posted in 2017. This translates to an average annual compensation of PhP294,325 per paid worker. (Table A)

Among industry groups, manufacture of refined petroleum products paid the highest average annual compensation of PhP2.3 million per paid worker, followed by manufacture of dairy products (PhP1.1 million) and manufacture of air and spacecraft and related machinery (PhP1.1 million).  (Figure 3 and Table 2)

Manufacture of electronic components leads in terms of value of output

Value of output generated by all manufacturing establishments in 2017 was estimated at PhP5.3 trillion, a 9.0 percent increase from the PhP4.8 trillion value of output posted in 2016.  (Table A)

The combined output value of the top 10 industry groups accounted for PhP2.9 trillion or 54.4 percent of the total. Manufacture of electronic components recorded the highest output value of PhP595.3 billion (11.3%).  This was followed by manufacture of refined petroleum products with PhP391.7 billion (7.4%) and manufacture of other food products with PhP331.0 billion (6.3%). (Figure 4 and Table 1)

Manufacture of refined petroleum products incurs the highest intermediate expense of PhP334.0 billion

Intermediate expense incurred by manufacturing establishments amounted to PhP3.5 trillion in 2017, a 9.1 percent increase from the previous year’s intermediate expense of PhP3.2 trillion. (Table A)

Manufacture of refined petroleum products recorded the highest intermediate expense amounting to PhP334.0 billion or 9.6 percent of the total. Manufacture of electronic components had the second highest intermediate expense of PhP293.3 billion (8.5%) while manufacture of motor vehicles placed third with PhP231.8 billion (6.7%). (Figure 4 and Table 1)

Income per peso expense stands at 1.16

The manufacturing sector generated an income per peso expense of 1.16 in 2017. Compared with the 1.14 income per peso expense in 2016, this was higher by 1.8 percent. (Table A)

Among industries, manufacture of air and spacecraft and related machinery had the highest return of 1.73, followed by manufacture of electronic components (1.40), and manufacture of consumer electronics (1.24). (Table 2)

Manufacture of electronic components generates the highest value added

Value added generated by all manufacturing establishments amounted to PhP1.4 trillion, an increase of 9.1 percent from the PhP1.3 trillion value added reported in 2016. (Table A)

The combined value added of the top 10 industry groups reached PhP900.0 billion (63.0%). Manufacture of electronic components contributed the biggest share of PhP278.8 billion (19.5%) to the total value added.  This was followed by manufacture of beverages and manufacture of tobacco products with value added of PhP116.5 billion (8.2%) and PhP99.0 billion (6.9%), respectively.

Labor productivity, which is the ratio of value added to total employment, was recorded at PhP1.1 million per worker in 2017, an increase of 9.0 percent compared with the PhP1.0 million per worker in 2016.

By industry, manufacture of refined petroleum products showed the highest labor productivity of PhP16.8 million per worker. Manufacture of motor vehicles (PhP10.6 million per worker) and manufacture of tobacco products (PhP8.0 million per worker) ranked second and third, respectively.  (Figure 5 and Table 2)

Manufacture of electronic components accounts for 68.4 percent of e-commerce sales

Sales from e-commerce transactions of all manufacturing establishments amounted to PhP82.6 billion in 2017. (Table 1) 

Manufacture of electronic components recorded the highest sales through e-commerce at PhP56.5 billion or 68.4 percent of the total. Processing and preserving of fruits and vegetables; and manufacture of basic chemicals ranked second and third with corresponding e-commerce sales of PhP8.5 billion and PhP7.7 billion, respectively.  (Table 1)

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

TECHNICAL NOTES

Introduction

This Special Release presents the final results of the 2017 Annual Survey of Philippine Business and Industry (ASPBI) for all Manufacturing (Sector C) establishments.

The ASPBI is one of the designated statistical activities of the Philippine Statistics Authority (PSA). Data collected from the survey provides information on the levels, structure, performance and trends of economic activities of the formal sector in the entire country for the year 2017. 

The survey was conducted nationwide in 2018 with 2017 as the reference period, except for employment which is as of 15 November 2017.

Establishment Data Management System (EDMS) was utilized in the decentralized processing of survey returns in the provinces as well as in the online accomplishment of questionnaires through the PSA website.

Data are presented by industry group as classified in the 2009 Philippine Standard Industrial Classification (PSIC) at the national level.

Legal Authority

The conduct of the 2017 ASPBI is authorized under Republic Act No. 10625 known as the Philippine Statistical Act of 2013 - Reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.

Scope and Coverage

The 2017 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 following sections of the 2009 PSIC are excluded from the scope of this survey and all other establishment-based surveys of PSA:

• Public Administration and Defense; Compulsory Social Security (Section O)
• Activities of Households as Employers; Undifferentiated Goods and Services Producing Activities of Households for Own Use (Section T)
• Activities of Extra-territorial Organization and Bodies (Section U)

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

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

Hence, the 2017 ASPBI covered only the following economic units:

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

Frame of Establishments

The frame for the 2017 ASPBI was extracted from the 2017 List of Establishments (LE). The estimated number of establishments in operation in the country in 2017 totaled to 917,582. About 228,112 (24.9%) establishments comprised the frame or are within the scope and coverage of the 2017 ASPBI.

Unit of Enumeration

The unit of enumeration for the 2017 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.

For manufacturing, the unit of enumeration consists of shop, factory, bakery, mill, distillery, refinery, cannery, abattoir, brewery, foundry, printing press, tannery or plant engaged in manufacturing, processing, fabricating or finishing products mechanically or manually including the assembly of component parts of manufactured products and the substantial alteration, reconstruction or repair of special type of goods and classified under economic organization such as: single establishment (EO=1), branch only (EO=2) and establishment and main office (EO=3).

Classification 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, non-profit corporation; and cooperative.

Industrial classification of an economic unit was determined by the activity from which it derives its major income or revenue.  The 2009 PSIC was utilized to classify economic units according to their economic activities.

Size of an establishment is determined by its TE as of a specific date. TE refers to the total number of persons who work in or for the establishment.

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

Sampling Design

The 2017 ASPBI uses stratified systematic sampling with region and industry as domains. The stratification variables are the industry stratum as the first stratification variable and employment as the second stratification variable.

The industry domains (industry strata) for the survey were the 5-digit level (industry sub-class) of the 2009 PSIC. For the manufacturing sector, 424 industry sub-classes serve as the industry domain.

Estimation Procedure

For Establishments with TE of Less Than 20

1. 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 employment of TE less than 20
x_sj        =value of the j^th establishment in the non-certainty employment stratum in employment of less than 20 in the 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 employment of less than 20 in the s^th industry domain

N_s       =total number of establishments in the non-certainty employment stratum in employment of less than 20 in the s^th industry domain
n_s       =number of sample establishments in the non-certainty employment stratum in employment less than 20 in the s^th industry domain

2. Certainty Stratum

The estimate of the total of a characteristic (X_c) for the certainty employment stratum in the c^th industry domain is

where: 

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

Total Estimate for TE of Less Than 20

The estimate of the total of a characteristic for the industry domain in each region (geographic domain) was obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,

where:

dp        denotes the industry domains in each region

National level estimates of the characteristics by industry domain were obtained by aggregating separately the estimates for the particular industry domain from all the regions.

Weight Adjustment Factor for Non-Response

To account for non-response in the non-certainty strata, the adjustment factors, and (n/n’) was multiplied 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’sj) for employment stratum in TE of 1-9 and 10-19 is

where:

N_s       total number of establishments in the employment stratum in TE of 1-9 and 10-19 in the sth industry domain
n’_s      number of responding establishments in the employment stratum in TE of 1-9 and 10-19 in the sth industry domain

For the non-certainty employment stratum in TE of 20-49 and 50-99, the adjusted weight (W'_spj) is

where:

N_sp      total number of establishments in the non-certainty employment stratum in  TE of 20-49 and 50-99 for an industry domain within each geographic domain (region)
n’_sp      number of responding establishments in the non-certainty employment stratum in TE of 20-49 and 50-99 for an industry domain within each geographic domain (region)

Response Rate

The response rate for all manufacturing establishments was 87.5 percent (4,385 out of 5,011 establishments). Included are receipts of "good" questionnaires; partially accomplished questionnaires; and reports of closed, moved out or out of scope establishments, etc.

The sample establishments also responded to the survey through the use of Web-based version of the 2017 ASPBI questionnaires which was accomplished online at the PSA website. The number of manufacturing samples which utilized the web-based version of the questionnaire totaled 168 establishments, only 3.4 percent of the total number of responding sample establishments.

Limitation of Data

The 2017 ASPBI covered only the formal sector of the economy.

Concepts and Definition of Terms

Total employment is the number of persons who worked in or for the establishment as of November 15, 2017.

Paid workers are all full-time and part-time workers working in or for the establishment and receiving pay, as well as those working away from the establishment and paid by and under the control of the establishment. Included also are all employees on sick or maternity leave, paid vacation or holiday and on strike. Excluded are directors paid solely for their attendance at meetings, consultants, workers on indefinite leave, working owners who do not receive regular pay, homeworkers, workers receiving pure commissions only and workers not in the payroll of this establishment.

Unpaid workers are working owners who do not receive regular pay, apprentices and learners without regular pay, and persons working for at least 1/3 of the working time normal to the establishment without regular pay. Excluded are silent or inactive business partners.

Compensation is the sum of salaries and wages, separation, terminal pay and gratuities paid by the employer to its employees and total employer’s contribution to SSS/GSIS, ECC, PhilHealth, PAG-IBIG etc.

Income or Revenue refers to cash received and receivables for goods sold and services rendered.

Expense refers to the cost incurred in an enterprise’s efforts to generate revenue, representing the cost of doing business. Excludes cost incurred in acquisition of income generating assets.

Value of output represents the sum of the sale of products and by-products, income from industrial services done for others, sale of goods  less cost of goods sold, fixed assets produced on own account, and change in inventories of finished products and work-in-progress.

Intermediate expense refers to expenses incurred in the production of goods and industrial services such as raw materials used; other materials and supplies used; fuels, lubricants, oils and greases used; electricity and water purchased and industrial services done by others.

Value added is gross output less intermediate input. Gross output for the manufacturing sector is value of output plus income from non-industrial services done for others (except rent income from land). Intermediate input is intermediate expense plus expense for non-industrial services done by others (except rent expense for land) and all other cost.

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

Change in total inventories is computed as the total value of ending inventory less the total beginning inventory.

Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry.

E-Commerce refers to the selling of products or services over electronic systems such as the Internet Protocol-based networks and other computer networks, Electronic Data Interchange (EDI) network, or other on-line system.