Frequently Asked Questions

1. What is the PSNA and its historical background for national accounts compilation?

The Present PSNA  

The Philippine System of National Accounts (PSNA) generates macroeconomic indicator on Gross Domestic Product (GDP). The GDP represents the monetary value of all final goods and services produced within the economy in a given period of time.

The PSNA describes a comprehensive view of the country’s economic performance and allows to monitor the behaviour and structure of the economy. The PSNA covers the economic transactions that are recorded in summary tables and balance sheets called accounts. These accounts are summarized in integrated, coherent and consistent manner based on the internationally agreed standard concepts, definitions, classifications and accounting rules.

The national accounts compilation in the Philippines has a long history which started in 1947 when the Joint Philippine American Finance Commission undertook the preparation of the estimates for the years 1938 and 1948. In 1950, the Central Bank of the Philippines (CBP) took over and came up with the first national accounts series from 1946 to 1959.

In 1957, the national accounts work was passed on to the Office of Statistical Coordination and Standards (OSCAS) of the National Economic Council (NEC) on the ground that national accounts estimation and analysis would be useful in policy formulation, economic program development and the assessment work of the NEC. 

In 1973, the reorganization of the government led to the creation of the National Economic and Development Authority (NEDA) as the successor of the NEC and continued the task of compiling the PSNA through its National Accounts Staff (NAS).

Improvement efforts continued until the government re-structuring of the Philippine Statistical System (PSS) took place in 1987. By virtue of the Executive Order No. 121, the Statistical Coordination Office was detached from NEDA and became the National Statistical Coordination Board (NSCB), which took over the task of compiling and maintaining the PSNA.

When the Philippine Statistical Act of 2013 was passed on September 2013 which established the Philippine Statistics Authority (PSA), as merged of the four (4) major statistical agencies, the compilation of national accounts become the responsibility of the PSA.

2. What are the uses of the PSNA?

The System of National Accounts (SNA) helps economists to measure the level of economic development and the rate of economic growth, the change in consumption, saving, consumption, investment, debt and wealth of the economy. From the data of SNA, economists can either forecast the future growth of the economy or study impacts on the economy and the institutional sectors of identified government policies and programs.

The PSNA which generates macroeconomic aggregates, e.g. the Gross Domestic Product, and Gross National Income, is released quarterly and are popularly used by economists for the following:

  • Define the structure and size of the economy;
  • Monitor the economic performance of the economy;
  • Describe the sources of growth of the economy;
  • Serve as bases for assessing government’s sectoral policies, programs, etc.
3. What is the basis for the compilation of the PSNA?

The PSNA adheres to the System of National Accounts 2008 (2008 SNA) which is an international standard for national accounting. It is a statistical framework that generates a set of macroeconomic accounts for policymaking, analysis and research purposes. The first SNA dates back in 1953 and had major updates in 1968, 1993, and, most recently, in 2008. 

The 2008 SNA provides the latest recommendations to national accounts standards and are intended for use by all countries. This is designed to accommodate the needs of countries at different stages of economic development.

The SNA also serves as a framework for identifying data gaps/weaknesses as well as inconsistencies of data which would serve as bases for statistical developmental activities towards addressing data deficiencies and inconsistencies for a more reliable official statistics.

The 2008 SNA is produced and released under the collaboration of the United Nations, the European Commission for Economic Co-operation and Development, the International Monetary Fund and the World Bank.

4. What agency is responsible for the compilation of the National Accounts in the Philippines?

Presently, the Philippine Statistics Authority (PSA) through the Republic Act 10625 known as the Philippine Statistical Act of 2013, signed into law on 12 September 2013, mandates the PSA through the Macroeconomic Accounts Service for the development and maintenance of national accounts, regional accounts, satellite accounts, input-output tables and other related macroeconomic accounts.

The development and maintenance of national accounts at the subnational levels to include the regional accounts and the provincial accounts are also the responsibility of the PSA. The Regional Statistical Service Offices (RSSOs) of the PSA in each of the seventeen (17) regions of the country are responsible in their respective regions for all the statistical coordination and development activities related to the national accounts.

5. What are the accounts presently developed and compiled under the PSNA?

The PSNA consists of the compilation of the Core Accounts and the Satellite Accounts which are released quarterly and annually following the Advance Release Calendar (ARC) of the PSA. The ARC provides details of the releases of the products and services of the PSA e.g. frequency of releases (monthly, quarterly, annual) as well as the specific dates and time of releases.

Core Accounts

The Core Accounts consists of the generation of the Gross Domestic Product (GDP) compiled at the production side, expenditure side and income side. The GDP production and GDP expenditure and its components are compiled and released every quarter and presented by major industries and by major expenditure items including details of each industry and expenditure items.

The GDP by income is compiled annually with disaggregation by institutional sector namely: financial corporations, non-financial corporations, general government, households including the non-profit institutions serving household sector. Performance economic indicators are also compiled resulting from the income approach of GDP namely: national income, disposable income, capital formation (or accumulation), external transactions, institutional savings and other relevant macroeconomic indicators.

The Input-Output (I-O) Accounts are also compiled following the System of Designated Statistics as mandated through the Executive Order (EO) 352. The existing EO mandates to identify and to generate the most critical and essential statistics required for social and economic planning based on approved criteria. The I-O presents a picture of the economy on how much commodities are produced and how much are consumed by industries, household, government, etc., as final users. The Supply and Use Tables (SUT), which serves as intermediate process before the compilation of the I-O, are also compiled to present an integrated and balanced picture of the total supply and total uses of goods and services in the economy.

Regional accounts consisting of the Gross Regional Domestic Product (GRDP) and the Gross Regional Domestic Expenditures (GRDE) are also compiled annually. For Gross Provincial Domestic Product, provinces of Palawan and Guimaras served as pilot provinces. Revisions and rebasing to 2018 of subnational accounts are programmed for implementation jointly with the regional offices of PSA.

Satellite Accounts

The Satellite Accounts serves to highlight the importance of special industries or products in the economy without overburdening the core accounts or the central framework of the System of National Accounts. This framework allows to present the contribution of special industries to the economy. The satellite accounts which are regularly compiled by the PSA are:

  • Tourism accounts;
  • Health accounts;
  • Environment and natural resources accounts;
  • Agriculture accounts;
  • Ocean accounts; and
  • Disaster risk reduction expenditure accounts.

To further support the analysis of the workings of the economy, the PSA regularly generate economic indicators/indices/statistics on the performance of agriculture, industries and services, on investments, on disaster and climate change, on environment, and other related indicators.

6. Why the need to revise and rebase the PSNA?

The Revisions and Rebasing of the PSNA

The PSA, as the compiler of the PSNA, has long recognized the need to improve the national accounts by updating the base year to a more recent one and to adopt the other recommendations of the 2008 SNA. As early as 2013 after the creation of the PSA and for almost seven (7) years now, the PSA started its efforts in this direction for revision and rebasing of national accounts.

Users of national accounts had also expressed the concern that the country’s economy is rapidly changing as results of information and communication technologies, the rise of globalization, digitalization of the economy and the existence of new types of transactions in the economy which deemed it important to revise and rebase the PSNA.

Revising and rebasing of national accounts statistics are considered an international practice among statistical offices worldwide like the revisions of other official statistics. Several countries which started/planned the revisions of national accounts following the recommendations of the 2008 SNA are: Australia, Canada, United States, Europe, Korea, Japan, New Zealand, Switzerland, Iceland and Norway. Implementation by these countries of the 2008 SNA standards and the revisions are either done on a staggered basis or all done at once.

Among the selected ASEAN countries, it was noted that present base years are: 2010 for Indonesia, Malaysia and Vietnam and 2012 for Lao PDR. The Philippines’ present base year for the revised and rebased new series of national accounts is 2018 which puts the Philippines ahead of other ASEAN countries.

In the PSA, the strategies adopted, among others, were to conduct a series of consultations among users of national accounts including data producers which wrapped-up in 2019 during the High Level Forum on the Overall Revision and Rebasing of the PSNA conducted on 30 March 2019 and the Focus Group Discussion on 28 September 2019. Presentations to regional users were also conducted in several fora during the press conferences of the Gross Regional Domestic Product (GRDP) conducted in the regions and in regional training conducted in clusters in Luzon, Visayas and Mindanao. Other implementation strategies were through a series of technical trainings on the 2008 SNA for national accounts compilers. Invited experts on national accounts came for three training missions from the International Monetary Fund (IMF) as well as experts from the ASEAN through the EU Compass Project who conducted two training missions. An international consultant, Dr. Viet Vu, formerly the Head of the National Accounts of the United Nations Statistics Division, was also commissioned to assist the PSA for the SNA training and to address compilation issues.

7. What are the series of revisions and rebasing done for the PSNA?

The Central Bank of the Philippines in 1950 came up with the first national account series for years 1938 and 1948.  From 1950 to 2020 or within the period of 70 years, there are five (5) series of revisions and changes of base years.  This includes the following:

Year Released Series of Revisions and Changes in Base Years
1963 First revision and rebasing, shift to 1967  from 1955 base year
1978 Second revision and rebasing, shift to 1972 from 1967 base year
1990 Third revision and rebasing, shift to 1985 from 1972 base year
2011 Fourth revision and rebasing, shift to 2000 from 1985 base year
2020 Fifth revision and rebasing, shift to 2018 as the present base year from 2000 base year

 

8. What are the legal bases to revise and rebase the PSNA?

The Philippine Statistics Act of 2013 or RA 10625 under Rule 4, Article 5 provides the mandates and functions of the PSA which, among others, shall primarily be responsible for the compilation of national accounts.

It was in 2018, when the Philippine Statistics Authority Board (PSA Board) approved the PSA Resolution No.11, Series of 2018 entitled “Approving the General Policy on the Revision and Rebasing of the Philippine System of National Accounts”.  This stipulates that the revision and rebasing of the PSNA should be every ten (10) years after the next release of the revised and rebased PSNA in 2020. This Resolution further resolved to program the synchronized conduct and releases of the PSA’s relevant and major censuses and surveys including the synchronized rebasing of price indices.

The revision and updating of the Quarterly National Accounts is also embodie in the PSA Resolution No. 01 Series of 2017-053 entitled “Approving the Policy on Updating the National Accounts”.

Other approved PSA Resolutions that provide policies on revisions and updating which affect the national accounts statistics include the following:

  • PSA Resolution No.01 Series of 2017-120 – Approving the General Policy on Revising the Data on Agricultural Production, Prices and Related Statistics;
  • PSA Resolution No. 2 Series of 2018 – Approving and Rebasing of the Consumer Price Index (CPI) from 2006 to Base Year 2012 and Adoption of the Chained Method in the 2012 –based CPI;
  • PSA Resolution No. 13, Series of 2018 – Rebasing of the Construction Materials Wholesale Price Index (CMWPI) from 2000 to Base Year 2012 and with Some Revisions in the Methodology;
  • PSA Resolution No. 10, Series of 2019 – Approving and Adopting the 2019 Philippine Standard Commodity Classification;
  • PSA Resolution No. 13 Series of 2019 – Rebasing of the General Retail Price Index (GRPI) and Construction Materials Retail Price Index (CMRPI) in the National Capital Region from 2000 to Base Year 2012 and with Some Revisions in the Methodology;
  • PSA Resolution No. 14 Series of 2019 – Rebasing of the General Wholesale Price Index (GWPI) from 1998 to Base year 2012 and with Some Revisions on the Methodology.
9. What are the major improvements and changes of the Revised and Rebased PSNA?
  • Shift to base year 2018 from the old base year 2000
  • Use of the 2018 Supply and Use Table for benchmark levels and for balanced GDP for production, expenditure and income
  • Expansion of coverage and highlighting of emerging industries and products g., Information Communication and Technology
  • Making explicit the adoption of the recommendations of the 2008 SNA
  • Adoption of the latest classification systems of industries, commodities, etc
  • Use of new benchmark data and parameters
  • Enhanced estimation methodologies

 

10. What are the considerations for shifting to 2018 as the new base year of the PSNA?

The choice of a more updated base year improves the measure of the economic growth and becomes more accurate if the base year is not too far back. The choice of a base year as shown in many literatures is that, the base year should represent a “normal year” for the economy – with no influences due to economic and financial crisis, disaster, typhoons, calamities and/or other related events that brings negative impact to the economy.

The PSA’s choice of 2018 as the new base year followed after assessing the series of the historical events, both international and domestic, which somehow affected the economy. It was noted that a choice of a normal year to be considered as the new base year posed some problems since the results of the evaluation did not have a conclusive basis on a normal year for a choice of the base year. This considers another criterion on the availability of data from censuses and surveys including administrative data to serve as bases for the compilation of the Supply and Use Table for the 2018 benchmark levels. Availability of data for base year became an important consideration which includes the following:

  • 2018 Census of Philippine Business and Industry (CPBI);
  • 2018 Family Income and Expenditure Survey (FIES);
  • 2018 Input-Output Survey of Philippine Business and Industry (IOSPBI);
  • 2018 Labor Force Survey (LFS);
  • 2018 Financial Statements of National Government and Local Government Units including Government-Owned and Controlled Corporations (GOCCs);
  • 2018 Private Financial Statements;
  • 2018 Re-referenced prices/price indices e.g. consumer prices, producers prices, retail prices, wholesale prices, construction materials prices, farm prices, international prices, world prices, etc.;
  • 2018 Exports and Imports Data (updated and re-run series).
11. What are the Supply and Use Tables and its role in the revised and rebased PSNA?

Components making up the GDP production and expenditure measures are estimated using independent approaches. We use various data from surveys and administrative based information with different measurements and timing differences which results in differences known as the statistical discrepancy.  The components within the supply and use framework are reconciled to provide an integrated and balanced picture of the total supply and total uses of goods and services in the economy. This process makes the estimates of SUT balanced between the production and expenditure.

In practice, the 2018 SUT was utilized to examine further the resulting revised/rebased estimates of the production and expenditure side of the accounts and balance these two sides of GDP taking into account the income side of the GDP. The SUT was compiled at the level of 80 detailed industries and 80 detailed commodities which allow presenting them in a summary level of 16 x 16 major industries and major commodities.  This activity was done to produce a zero statistical discrepancy (SD) for the 2018 benchmark year while ensuring the conceptual soundness of the national accounts.

For non-benchmark years, the target is to maintain zero SD’s for the annual estimates and to keep the SD to GDP ratio to a minimum of one percent or less, both at current and at constant prices for the quarterly estimates. 

12. What are the changes in the classifications by industry?

Following the 2009 Philippine Standard Industrial Classification (2009 PSIC), an important feature of the revised and rebased national accounts is to allow, in a more systematic way, the expansion of the coverage of industries as well as to provide a more analytical presentation of the accounts. The new configuration now presents eighty (80) sub-industries grouped into sixteen (16) major industries as compared to the old configuration of seventy-two (72) sub-industries which is grouped into twelve (12) major industries. This include the following new configuration of industries:

  • Agriculture, forestry and fishing;
  • Mining and quarrying;
  • Manufacturing;
  • Electricity, steam, water, and waste management;
  • Construction;
  • Wholesale and retail trade; repair of motor vehicles and motorcycles;
  • Transportation and storage;
  • Accommodation and food service activities;
  • Information and communication;
  • Financial and insurance activities;
  • Real estate activities;
  • Professional, and business services;
  • Public administration and defense; compulsory social activities;
  • Education;
  • Human health and social work activities;
  • Other services.
13. What are the changes in the classifications by expenditure?

Under the expenditure side of the GDP, “Valuables” is an additional expenditure item which is now captured and highlighted as additions to the gross capital formation. The new classification of the expenditure side are as follows:

  • Household final consumption expenditure;
  • Government final consumption expenditure;
  • Gross capital formation:

Gross fixed capital formation:

Construction,
Durable equipment,
Breeding stocks and orchard development,
Intellectual property products;

Changes in inventories;

Valuables;

  • Exports:

Exports of goods,
Exports of services;

  • Imports:

Imports of goods,
Imports of services.

Some of the major expenditure items e.g., Durable equipment and Exports and Imports of goods and services highlighted new commodities aligned with the latest 2015 Philippine Standard Commodity Classification (PSCC) and BPM6 Manual.

14. What are the recommendations of the 2008 SNA including improvements that were considered in the revised and rebased PSNA?

The recommendations in the 2008 SNA, mostly affecting the Gross Domestic Product and Gross National Income were prioritized for inclusion in the new revised and rebased national accounts. The considerations are on the feasibility to adopt, availability of data and its impact to ensure consistencies and coherent of the concepts with other international standards.

Among others, the following improvements were undertaken:

  1. Expansion of the scope and coverage of industries and expenditure items;
  2. Use of more updated data including new data sources;
  3. Better estimation methodologies; and
  4. Harmonization with other existing international standards e.g., BPM6 Manual

The following are some examples showing the changes incorporated for the revised and rebased data series of national accounts:

    Changes affecting the production side of GDP 

Industry Changes
Agriculture Forestry and Fishing
  • Adopt the SNA concept of industry like inclusion of secondary activities of farmers; Ex. a palay farmer can engage on other activities e.g. trading, raising livestock and poultry
  • Inclusion other livestock and poultry e.g. horses, quails, crocodiles, ornamental plants, etc.
  • Inclusion of “work-in-progress” in agriculture
Mining and quarrying
  • Highlighted coal, precious metals as separate sub-industry
Manufacturing
  • Highlighted manufacturing of pharmaceuticals products and repair/installation of machinery and equipment
  • Merged computer, electronics and optical products;
  • Merged transport equipment
  • Transferred publishing to ICT; repairs of furniture to repairs of consumer durables; recycling to waste collection.
Electricity, Steam, Water, and Waste Management
  • Inclusion of sewerage, waste management and remediation activities
Construction
  • Updating of parameters
  • Presentation of gross value of construction by institutional sector, e.g. household, government, corporation.
Trade
  • Excludes retail trade of motor vehicles and motorcycles
  • Increase coverage of household unincorporated activities (e.g. trading through online).
Transportation and Storage
  • Increase coverage of household unincorporated activities (e.g. Transportation Network Vehicle Service (TNVS) System)
Accommodation and Food Service Activities
  • Highlighted as new industries, formerly from hotels and restaurants
  • Increase coverage of household unincorporated activities (e.g. increase activities through online marketplace facilitation)
Information and Communications
  • Highlighted as new industries to include:
  1. Telecommunications;
  2. Publishing Activities;
  3. Motion picture, video and television programme activities;
  4. Programming and broadcasting activities;
  5. Computer programming, consultancy and related activities;
  6. Information Service
Financial and Insurance Activities
  • Highlighted insurance activities and re-insurance
  • Capturing digital financial transactions
Professional and Business Activities
  • New highlighted industry (previously named Renting and Business Activities)
  • Increase coverage of household unincorporated activities (i.e. digital economy)
Public Administration and Defense; Compulsory Social Security
  • Use of updated data on income and expense from updated financial statements of the Commission on Audit
  • Use of updated deflators from updated financial statements of the Commission on Audit

 

       Changes affecting the expenditure side of GDP

Expenditure Changes
Household final consumption expenditures
  • Inclusion of expenditures of Filipino residents abroad
  • Better capture of institutional households from the Census of Population e.g., prisons, dormitories, etc.
  • Use of alternative data sources e.g., revenue data from the Census of Philippine Business and Industry for Retail Trade
Government final consumption expenditures
  • Use of updated data on income and expense from updated financial statements of the Commission on Audit
  • Use of updated deflators
Durable equipment
  • Inclusion of interplant transfer of durable equipment produced for own final use
  • Exclusion of non-durable equipment e.g. spare parts for equipment and machineries, small tools, etc.
Breeding stocks and Orchard development
  • Inclusion of other livestock for breeding stocks e.g., horses, dogs, ostrich, etc.
  • Inclusion of other plantations for consideration under orchard development like cacao, coffee, durian, etc.
  • Updates of parameters on expenditures or maintenance costs of permanent trees under orchard development from the field visit results
Valuables
  • New additions under gross capital formation – examples are precious stones, jewelleries, paintings, etc., which are considered “store of values” by holder of these economic assets.
Export and Imports
  • Harmonize SNA compilation of Exports and Imports of Goods with the Balance of Payment Manual 6 (BPM6) to include the following:
    • Refinements for the recording of goods for processing
    • Inclusion of net merchanting
    • Inclusion of tuna caught on high seas
    • Catering and fuel services availed by resident/non-resident airlines
  • Improvement of estimation methodologies for better capture of export and imports, both goods and services
  • Use of updated BOP data
Net Primary Income
  • Adoption of one-year residency rule in accounting for the compensation of land-based workers under the GNI;
  • Accounting for total outflow of compensation paid by residents to non-residents working in the Philippines  

 

15. What are the latest classification systems adopted in the revised and rebased PSNA?

An important 2008 SNA recommendations, among others, is the adoption of the latest classification systems to align with the latest international standards. For the revision and rebasing of the PSNA, the following classification standards were adopted:

  • 2009 Philippine Standard Industrial Classification (PSIC) – is a classification of industries prevailing in the country according to their specific economic activities;
  • 2015 Philippine Standard Commodity Classification (PSCC) – is a detailed classification of all commodities that are produced in the domestic economy including those commodities that enter the Philippine Trade;
  • 2009 Philippine Classification of Individual Consumption According to Purpose (PCOICOP) – is a detailed classification of individual consumption expenditures on goods and services;
  • 2018 Philippine Standard Geographic Classification (PSGC) – is a systematic classification and coding of the geographic areas in the country;
  • 2012 Philippine Standard Occupational Classification (PSOC) – is a classification of different occupations of the working populations including the military workforce of the country.
     
16. What are the new data used?

Benchmark data and annual data for the revised and rebased PSNA are provided from censuses and surveys of establishments and households, administrative data like financial statements as well as alternative data sources from field visits and special studies.

Specifically, these data that supports the estimation of the revised and rebased PSNA are as follows:

  • Census of Philippine Business and Industry, 2012 and Preliminary 2018
  • Census of Agriculture and Fisheries, 2012
  • Annual Surveys of Philippine Business and Industry, 2013, 2014, 2015, 2016
  • Input Output Surveys of Philippine Business and Industry, 2012 and Preliminary 2018
  • Family Income and Expenditure Surveys, 2012, 2015 and Preliminary 2018
  • Cost and Return of Production of Agricultural Crops
  • Foreign Trade Statistics
  • Results of Field Visits
  • Annual Financial Reports from COA
  • Balance of Payments

In addition, other data sources from private agencies and private associations serve to supplement the benchmark data.  These are mostly coming from:

  • Maynilad Water Services, Inc (MWSI);
  • Manila Water Company, Inc (MWCI);
  • Manila Electric Company (MERALCO);
  • Cement Manufacturer’s Association of the Philippines (CeMAP);
  • Chamber of Mines;
  • Chamber of Automotive Manufacturers of the Philippines (CAMPI);
  • Business Processing Association of the Philippines (BPAP);
  • Contact Center Association of the Philippines (CCAP);
  • World Bank (international commodity prices) including Dubai prices
  • Construction Association of the Philippines
  • Philippine Stock Exchanges (on Financial Statement of listed companies);
  • Consolidated Financial Statements of the Conference of Inter-island Ship owners and Operators (CISO);
  • Financial indicators (including trends) ono revenue, income and expenses of private banks and private non-banks (e.g. pawnshops, money changers)
     
17. What are the new estimation methodologies adopted for Production Approach of the Gross Domestic Product?

Methodologies of the Revised and Rebased PSNA

Gross Domestic Product is the sum of gross value added of all resident producer units.

Gross value added (GVA) is defined as the value of output less the value of intermediate consumption. Output is defined the goods and services produced by an establishment. It is equal to the value of sales adjust for the changes in inventories of finished goods, that is goods produced and ready  for sale but not yet sold, or goods sold adjusted for sales of goods produced in an earlier period. Meanwhile, Intermediate Consumption consists of the value of the goods and services consumed as inputs by a process of production, excluding fixed assets whose consumption is recorded as consumption of fixed capital.

GDP is based on the concept of Gross Value Added (GVA).  The production measure of GDP is derived as the as the value of output less intermediate consumption plus any taxes less subsidies on products not already in value of output.

Operationally, GDP at the production of the PSNA is compiled for the industries which allows the study of industrial activity in the economy and permits the compilation of supply and use tables and input-output tables.  Sectoring of the industries is based 2009 Philippine Standard Industrial Classification System (PSIC).  The aggregates, referring to Output and Intermediate Consumption, are neither asked in surveys or censuses.  For instance, businesses do not directly measure their intermediate usage of goods and services; rather they record their purchases and the changes in inventories of fuels and materials. These are derived data from the specific items processed from the results of establishment surveys, household surveys and administrative data, as shown in Table 1.

Table 1. Production Items

Gross Output        
  • Revenue from main activity
  • Industrial services done for others
  • Non-industrial done for others
  • Trade margin on goods for resale
  • Changes in inventory of finished products, goods for resale and work-in-progress
  • Fixed assets produced on own account
  • Other income
Less:
Intermediate  Consumption
  • Materials and supplies
  • Fuels purchased
  • Electricity consumed
  • Industrial services done by others
  • Changes in inventory of materials and supplies
  • Other intermediate cost  
Gross Value Added  

 

GDP is the sum of the gross value added for each of the sixteen (16) industries in the PSNA, as described in statistical notations below:

Where:       

 

GDP = gross domestic product
GVA = gross value added
j  = industry classification (i.e. AFF, MAQ MFG,…OS)

 

A. Production Approach of measuring GVA at industry level

Measuring GVA at the industry level takes into account both the goods and services produced by the organized industry and unorganized industry for a more comprehensive picture of the performance of the industries or the economy as a whole. The organized industry includes the establishments and the government as producers of market output, output for own use, and non -market outputs, while the unorganized industry includes those that are not part of the organized industry but also producers of output such as the households.

A.1. Organized Industry

Measuring GVA is done at the most detailed possible. It is computed at the 5-digit level of PSIC for each of the sub-industries in an industry and then summed up to derive the total GVA of the industry.

Where:

        GVA     = gross value added
        GO       = gross output
        IC         = intermediate consumption
        i           = sub-industry classification
        m         = number of 5-digit level PSIC in the jth industry

A.2. Unorganized industry

Goods and services produced not captured in formal establishment surveys like the ASPBI and CPBI as well as administrative data are also included in the estimation of GDP by indirectly estimation using the residual employment approach.

Using this approach, employment in the unorganized industry is derived as the residual of the employment of Labor Force Survey (LFS) and the CPBI for the benchmark year or the ASPBI for the non-benchmark years. The residual employment is multiplied to the per capita gross output of small establishments or those establishments with less than 20 employees in the ASPBI and CPBI to derive the gross output of the unorganized industry. Gross value added is derived by multiplying the resulting gross output to the gross value added ratio of small establishments.

The residual employment approach in measuring GVA of unorganized industry is shown below:

Where:

GVAunorg  = gross value added of unorganized industry
GOunorg  = gross output of unorganized industry
GVArsmall   = gross value added ratio for small establishments
EMPunorg  = estimated unorganized employment
Emplfs  = total employment from the Labor Force Survey
Emporg  = total organized employment from the  establishment survey

Unlike in estimating the GVA of organized industry, estimating GVA of the unorganized industry is done at the more aggregate level, which the industry level, because of the limitations  in terms of representativeness of  the data.

B. Computing gross value added ratio

Gross value added ratio is a derived parameter indicating the amount of gross value added per unit of gross output. At the industry level, gross value added ratio is computed as:

Where:

GVAr    = gross value added ratio
GVA     = gross value added
GO       = gross output of an industry
i           = sub-industry classification

C. Derivation of GDP at Constant Prices

Constant price estimates of GDP are obtained by expressing values in terms of a base period. In theory, the price and quantity components of a value are identified and the price in the base period is substituted for that in the current period.

The 2018-based constant price estimation used the single extrapolation method. This is an improvement in the estimation methodology as compared to the single deflation method used in the 2000-based series. The operational methodology of the single extrapolation method is described below.

Single Extrapolation

This method means that the “output is deflated using an output price index.”1 The value added is extrapolated by using volume indicators, and the assumption is that there is a constant relationship in the output, intermediate consumption and value added in volume terms.

Operationally, the single extrapolation approach includes the following steps:

  1. The Gross Output at constant prices was derived by deflating the GO at current prices with an appropriate or closest price deflator as possible.

where

G0 cut= estimated GO at time t at current prices
G0 k t= estimated GO at time t at constant prices
G0 deft= price deflator for the gross output at time t

  1.  The Gross Value Added (GVA) at constant prices is then computed by:

where:

G0 k t= estimated GO at time t at constant prices
GVA k t= estimated gross value added at time t at constant prices
GVA r2018= gross value added ratio in the base year 2018

18. What are the new estimation methodologies adopted for Expenditure Approach of the Gross Domestic Product?

GDP using the expenditure approach is derived as the sum of all final expenditures, changes in inventories and exports of goods and services less imports of goods and services.

Household Final Consumption Expenditure

For the 2018-based estimates for the overall revision and rebasing of the PSNA, the main statistics being utilized is retail trade output, with the assumption that the sales of goods (output) from retail trade is equal to the consumption of households. However, it also includes sales to other consumers such as foreign employees or visitors (non-residents). Hence, retail statistics is adjusted to remove expenditure of non-residents in the domestic area using inbound tourism expenditure from PTSA and data on alien employees from DOLE. Lastly, the gross output of various industries i.e., recreation, ownership of dwellings, electricity, water, etc., were added to the estimate since retail covers the expenditure on goods only.

Government Final Consumption Expenditure

The estimates for GFCE is derived separately for national government, local government, social security schemes and non-profit institutions serving government using the data  from the Commission on Audit and the Department of Budget and Management.

Durable Equipment

The ASPBI/CPBI was utilized using the data on capital expenditure on machinery and equipment by industry. Likewise, balance sheet data from COA on property plant and equipment of National and Local government and GOCC were also processed. The processed ASPBI/CPBI and GOCC COA report constitute the private durable equipment and the National and Local government COA report constitute public durable equipment.

The 2018 benchmark estimate of durable equipment was disaggregated into imported and local component using the cost insurance and freight from the foreign trade statistics (imports) and value of product shipped/sold to domestic market including the interplant transfers from the ASPBI/CPBI of manufacturing sector.

Breeding Stocks and Orchard Development

The value of fixed capital formation on breeding stocks used as fixed capital is derived as the product of the number of animals (livestock and poultry) used as capital translated into live weight and relevant price. To account for the population of animals used as fixed capital, available ratio of the number of animals used as fixed capital to total animals from BLPS and CLPS is applied to the ending inventory data from the CAF. Price are derived from the sum of farm gate price and trade margin. Available inventory data for other animals from CAF which are not available in the BLPS and CLPS are used to account for the undercoverage.

On the other hand, the value of capital formation in orchard development is based on the expenditure incurred in the areas to be planted and the cultivation of permanent crops until these become productive.

Intellectual Property Products

In the estimation of IPP, various data sources were utilized specifically from the Annual Survey of Philippine Business and Industry (ASPBI) and Census of Philippine Business and Industry (CPBI). The results from private establishments include capital expenditures on intangible fixed assets like: a) research and development; b) mineral exploration; c) computer software and databases; and d) entertainment, literary or artistic original, and other intangibles. We also used data from COA and DBM to estimate expenditures of the public sector. IPP is the summation of all components of intangible fixed assets spent by the private and public institutions.

Changes in Inventories

For each subcomponent, the beginning and ending inventory levels are gathered from the source agencies or in some cases estimated using some indicators. For the estimation of raw sugar inventory, commodity flow approach is used to derive the ending inventory. Inventory levels are either in volume terms or in book values. Hence, there is an estimation methodology that will require transforming book values into volume terms. Appropriate prices and deflators are consolidated for proper valuation of each subcomponent.

Valuables

Two approaches were considered in the estimation of valuables, the demand side which is the summation of costs of valuables acquired by institutional units and the supply side which is the summation of costs of valuables locally-produced and acquired from the rest of the world. The 2018 benchmark estimate of valuables was disaggregated into imported and local component using the cost insurance and freight from the foreign trade statistics (imports) and value of product shipped/sold to domestic market including the interplant transfers from the ASPBI/CPBI of manufacturing sector.

Exports and Imports of Goods

The monthly FTS exports/imports data were used and processed in terms of the classifications based on the 2015 PSCC. In order to align with the National accounts concept, replacement and returned goods, articles temporarily exported/imported, and goods on consignment basis were deducted to come up with the total Exports and Imports of Goods. The FTS data, which are valued at fob, are converted to Philippine peso (PhP) using the monthly average buying and selling rates to account for the peso/dollar appreciation/depreciation.

Exports and Imports of services

Using the data mostly from the Balance of Payments of BSP, the following components are summed-up to derive the Services:

  • Transportation Services;
  • Insurance Services;
  • Travel Services;
  • Government goods and services;
  • Miscellaneous services.

Net Primary Income

The Net Primary Income is derived by deducting the compensation outflow and property expense from the compensation inflow and property income. Data from the POEA and DOLE were used to derive the compensation while data from the Primary Income Account from BSP is used to estimate the property income and expense.

References and Acronyms

References:

International Monetary Fund (2017): Quarterly National Accounts Manual, 2017 Edition, IMF, Washington DC.
Available from: https://www.imf.org/external/pubs/ft/qna/

United Nations (2008):  System of National Accounts, 2008, United Nations Publications Sales No. E.08.XVII.29
Available from: https://unstats.un.org/unsd/nationalaccount/sna2008.asp

 

List of acronyms

ARC Advance Release Calendar
ASEAN Association of Southeast Asian Nations
ASPBI Annual Survey of Philippine Business and Industry
BLPS Backyard Livestock and Poultry Survey
BOP Balance of Payments
BPM6 Balance of Payments and International Investment Position Manual, 6th edition
BSP Bangko Sentral ng Pilipinas
CAF Census of Agriculture and Fisheries
CBP Central Bank of the Philippines
CLPS Commercial Livestock and Poultry Survey
CMRPI Construction Materials Retail Price Index
COA Commission on Audit
CPBI Census of Philippine Business and Industry
DBM Department of Budget and Management
DOLE Department of Labor and Employment
FIES Family Income and Expenditure Survey
FTS Foreign Trade Statistics
GDP Gross Domestic Product
GNI Gross National Income
GO Gross Output
GOCC Government-Owned and Controlled Corporations
GRDE Gross Regional Domestic Expenditure
GRDP Gross Regional Domestic Product
GRPI General Retail Price Index
GVA Gross Value Added
GWPI General Wholesale Price Index
ICT Information and Communications Technology
IPP Intellectual Property Products
IMF International Monetary Fund
I-O Input - Output Tables
LFS Family Income and Expenditure Survey
NCR National Capital Region
NEC National Economic Council
NEDA National Economic and Development Authority
OSCAS Office of Statistical Coordination and Standards
PCOICOP Philippine Classification of Individual Consumption According to Purpose
POEA Philippine Overseas Employment Authority
PSA Philippine Statistics Authority
PSCC Philippine Standard Commodity Classification
PSIC Philippine Standard Industrial Classification
PSNA Philippine System of National Accounts
PSOC Philippine Standard Occupational Classification
PSS Philippine Statistical System
PTSA Philippine Tourism Satellite Accounts
QNA Quarterly National Account
RA 10625 Republic Act 10625
SD Statistical Discrepancy
SNA System of National Accounts
SUT Supply and Use Tables
TNVS Transportation Network Vehicle Service
UNSD United Nations Statistics Division

 

Annexes

Annex 1: INDUSTRIES and SUB-INDUSTRIES
As of April 2020

Industry Sub-industry
01.  Agriculture, forestry, and fishing Palay
Corn 
Coconut including copra
Sugarcane including muscovado sugar-making in the farm
Banana
Mango
Pineapple
Coffee
Cassava
Rubber 
Cacao
Abaca
Tobacco
Other agricultural crops, n.e.c.
Livestock
Poultry and egg production
Other animal production
Forestry and logging
Fishing and aquaculture
Support activities to agriculture, forestry and fishing
02.  Mining and quarrying Mining of coal
Extraction of crude petroleum and natural gas
Mining of nickel ores
Mining of copper ores
Stone quarrying, and other mining and quarrying
03.  Manufacturing Manufacture of food products
Manufacture of beverages
Manufacture of tobacco products
Manufacture of textiles
Manufacture of wearing apparel
Manufacture of leather and related products, including footwear
Manufacture of wood, bamboo, cane, rattan articles and related products
Manufacture of paper and paper products
Printing and reproduction of recorded media
Manufacture of coke and refined petroleum products
Manufacture of chemical and chemical products
Manufacture of basic pharmaceutical products and pharmaceutical preparations
Manufacture of rubber and plastic products
Manufacture of other non-metallic mineral products
Manufacture of basic metals
Manufacture of fabricated metal products, except machinery and equipment
Manufacture of computer, electronic and optical products
Manufacture of electrical equipment
Manufacture of machinery and equipment except electrical
Manufacture of transport equipment
Manufacture of furniture
Other manufacturing
04.  Electricity, steam, water and waste management Electricity
Steam
Water supply
Waste management
05.  Construction Construction
06.  Wholesale and retail trade; repair of motor vehicles and motorcycles Wholesale trade, except of motor vehicles and motorcycles
Retail trade, except of motor vehicles and motorcycles
Sale and repair of motor vehicles and motorcycles
07.  Transportation and storage Land transport
Water transport
Air transport
Warehousing and storage, and support activities for transportation
Postal and courier activities
08.  Accommodation and food service activities Accommodation
Food and beverage service activities
09.  Information and communication Publishing and information
Communication
10. Financial and insurance activities Banking institutions
Non-banks
Insurance and pension funding except compulsory social security
Activities auxiliary to financial services activities
11. Real estate and ownership of dwellings Real estate
Ownership of dwellings
12. Professional and business services Professional and business services
13. Public administration and defense; compulsory social activities   
14. Education Public education
Private education
15. Human health and social work activities Public human health
Private human health
Social work activities
16. Other services Arts, entertainment and recreation
Other service activities

 

EXPENDITURE TYPE and EXPENDITURE GROUP or EQUIPMENT/ITEM
As of April 2020

Expenditure type Expenditure group/Equipment/Item
01.  Household final consumption expenditure Food and non-alcoholic beverages
Alcoholic beverages, tobacco
Clothing and footwear
Housing, water, electricity, gas and other fuels
Furnishings, household equipment and routine household maintenance
Health
Transport
Communication
Recreation and culture
Education
Restaurants and hotels
Miscellaneous goods and services
02.  Government final consumption expenditure Government final consumption expenditure
03.  Construction General government
Financial and non-financial corporations
Households and NPISHs*
04.  Durable equipment Machinery specialized for particular industries
     Agricultural machinery
     Mining and construction machinery
     Textile machinery
     Pulp and paper machinery
     Metal working machinery
     Telecommunication and sound equipment
     Food processing machinery
     Other special industrial machinery
General industrial machinery and equipment
     Air conditioning and refrigeration equipment
     Pumps and compressor
     Power generating machinery
     Other general industrial machinery
Transport equipment
     Road transport
     Railway transport
     Air transport
     Water transport
Miscellaneous equipment
     Office machinery and data processing
     Furniture and fixture
     Professional machinery and equipment
     Other miscellaneous durable equipment
05.  Breeding stocks and orchard development Breeding stocks and orchard development
06.  Intellectual property products Intellectual property products
07.  Changes in inventories Changes in inventories
08.  Valuables Valuables
09.  Exports of goods Electronic Products
     Components/devices (semiconductors)
     Electronic data processing 
     Office equipment
     Consumer electronics
     Telecommunication
     Communication/radar
     Control instrumentation
     Medical/industrial instrumentation
     Automotive electronics
Agricultural products
     Bananas (fresh)
     Coconut oil
     Copra oil cake or meal
     Dessicated coconut
     Mangoes
     Pineapple and pineapple products
     Sugar
     Other agricultural products
Fishery products
     Shrimps and prawns
     Tuna
Articles of apparel and clothing accessories
Cathodes and sections of cathodes, of refined copper
Ignition wiring sets
Metal components
Petroleum products
Machinery and transport equipment
Chemicals
Woodcrafts and furniture
Processed food and beverages
Other exports of goods
10. Exports of services Transport
Insurance and pension services
Travel
Government goods and services n.i.e.
Telecommunications, computer and information services
Business services
Manufacturing services on physical inputs owned by others
Miscellaneous services
11. Imports of goods Electronic products
     Components/devices (semiconductors)
     Electronic data processing 
     Office equipment
     Consumer electronics
     Telecommunication
     Communication/radar
     Control instrumentation
     Medical/industrial instrumentation
     Automotive electronics
Mineral fuels, lubricants and related materials
Industrial machinery and equipment
Power generating and specialized machinery
Base metals
Transport equipment
Textile yarn, fabrics, made-up articles and related products
Electrical machinery
Chemical and chemical products
Cereals and cereal preparation
Dairy products
Medicinal and pharmaceutical products
Paper and paper products
Feeding stuff
Metalliferous ores and metal scrap
Metal products
Plastics in primary and non-primary forms
Fruits and vegetables
Professional scientific apparatus
Articles of apparel
Other imports of goods
12. Imports of services Transport
Insurance and pension services
Travel
Government goods and services n.i.e.
Telecommunications, computer and information services
Business services
Charges for the use of intellectual property
Miscellaneous services

Source: Philippine Statistics Authority

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Technical Inquiries

Ms. Vivian R. Ilarina
Assistant National Statistician
Macroeconomic Accounts Service
(632) 8376-1996
v.ilarina@psa.gov.ph

Mr. Mark C. Pascasio
Division Chief
Expenditure and Integrated Accounts Division
Macroeconomic Accounts Service
(632) 8376-1982
m.pascasio@psa.gov.ph

 

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Librarian II
Knowledge Management and Communications Division
(632) 8462-6600 local 839
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