I.    Conceptual Framework

The Economy-Wide Material Flow Accounts (EW-MFA) of the Philippines presents the entry of materials from the natural environment to the national economy, as well as the physical trade with the rest of the world. It provides information that allows us to monitor the resource efficiency in consumption and production. 

The Use of Natural Resources in the Economy: A Global Manual on Economy Wide Material Flow Accounting  serves as the framework for this study. The manual provides a comprehensive summary of the current methods developed for compiling economy-wide material flow accounts at the national level. The manual is supported by the

United Nations Environment Programme (UNEP), United Nations Statistics Division (UNSD), Organisation for Economic Co-operation and Development (OECD) and the Statistical Office of the European Union (Eurostat). It is based on the guidelines of Eurostat and the OECD and employs principles that facilitate their integration into the System of Environmental-Economic Accounting (SEEA). The SEEA is a 

multi-purpose conceptual framework that quantitatively describes the interaction between the environment and the economy by organizing environmental and economic data to generate integrated information for policy-making purposes.

Accounts and indicators based on the EW-MFA provide a comprehensive overview of natural resources, waste disposal, and emissions. They measure the environmental pressures resulting from natural resource use. The EW-MFA-based headline indicators have been used as a proxy for the overall environmental pressure and impact of a national economy.

The core account for EW-MFA includes information on domestic extraction, imports, and exports. Domestic extraction refers to the amount of used material inputs from the environment to the economy. 

It specifically involves material that has been extracted and processed by humans, while excluding any unused extraction. 

Domestic extraction can be categorized into four categories: 

(1)    Biomass: This category includes organic non-fossil material of biological origin. 

(2)    Metal ores: These are recorded in terms of gross ore based on their chemical classification as metals found in the periodic table of elements.

(3)    Non-metallic minerals: This category include flows of minerals that are non-metallic according to their chemical classification, such as marble, limestone, sand, and gravel.

(4)    Fossil fuels: These include flows of natural inputs of fossil energy, such as coal, peat, petroleum, and natural gas. 

Imports and exports are product flows between the economy of concern and the rest of the world. 

The EW-MFA also provides the inputs for calculating indicators for 

SDG 8.4: “Improve Resource Efficiency in Consumption and Production” and SDG 12.2: “Sustainable Management and Efficient Use of Natural Resources”. These indicators focus on the equitable extraction, production, and consumption of resources toward environmentally sustainable economic growth.

II.    Data Sources

The data for estimating the EW-MFA and the related SDG indicators were obtained from the following:

III.    Estimation Methodology 

DOMESTIC EXTRACTION

Domestic extraction (DE) refers to the measurement of material flows that come from the environment and those that enter the economic system for further processing or direct consumption. Materials that are either converted or incorporated into products usually have economic value, that is, if they are used by the economy. To distinguish these flows from domestic extraction that was not used, this is sometimes referred to as “domestic extraction used” (DEU). The estimation methodology of the accounts and indicators of the DE is estimated by using the equation below.

Biomass

DE of biomass includes all biomass of vegetable origin extracted by humans and their livestock, capture of wild fish, and the biomass of hunted animals. All production of crops reported in agriculture statistics are included in the compilation. Crop products are categorized and aligned with the subcategories of the EW-MFA.

Crop residues consist of straw, other crop residues, fodder crops and grazed biomass. Straw and other crops residues are computed based on the suggested harvest factor and recovery rate of the specific country.   
In Philippines, the suggested recovery rate for straw was 80 percent while the harvest factor varies depending on the crops commodities: 1 for rice paddy and 3 for maize and sorghum. The amount of crop residues is estimated as follows:

Grazed biomass is computed by multiplying the number of animals by their roughage intake and the percentage of roughage intake attributed to grazing. There is a suggested roughage intake for specific animal type by country. Additionally, the percentage of roughage intake from grazing is based on the percentage of cattle, carabao, and goats raised in smallhold farms. It is assumed that these animals obtain their roughage intake from grazing in pastures and similar areas.    
 

Wood is typically measured in terms of volume rather than weight.  To calculate the weight of wood in tons at 15 percent moisture content, the EW-MFA manual recommends using a conversion factor depends on the type of wood – either coniferous or non-coniferous. In the Philippines, majority of the wood is classified as non-coniferous. Therefore, the conversion for non-coniferous was used in the compilation.

The EW-MFA recommends compiling all wild fish catches. All fish production reported in the national data are included in the compilation, excluding aquaculture.   
Once necessary data becomes available, it will also include the biomass of wild aquatic plants, wild terrestrial plant harvest, and wild terrestrial animal catch.

Metal ores

In this compilation, the focus is on specific metal ores, which include gold, copper, nickel, chromite, and iron. The requirement for EW-MFA pertains to the metal ores rather than the finished products. Data for nickel, chromite, and iron ores were provided by the Mines and Geosciences Bureau (MGB).

For gold and copper, the method used involves back-calculating ore tonnages using the amount of produced metal, ore grade, and recovery factors. Data on ore extracted and ore grade for years 2022 and 2023 were provided by MGB. These inputs were used as parameters to estimate the ore tonnages for the time series.   
The calculation for gold ore tonnage is:

Meanwhile for copper, the formula in calculating the ore tonnage is:   
 

Non-metallic minerals

Commodities under this category include the minerals mainly produced in the country, such as: Basalt, Dolomite, Limestone, Sand & Gravel, Aggregates, Pozzolan, Shale, and Silica Sand.

If the data is expressed in volume (cubic meters), it is converted to metric tons. The conversion factors vary for each commodity. Default conversion factors from the EW-MFA manual were used for non-metallic minerals.   
 

The default conversion factors provide specific densities for several common non-metallic minerals. However, it is preferable for these values to be tailored to the specific minerals extracted in the area being analyzed. The coverage of the sand and gravel data is based on reports from the MGB, excluding the production data from the local government units.

Fossil fuels

Fossil fuels are materials that have formed from biomass in the geological past and comprise solid, liquid, and gaseous materials. These consist of coal and peat, crude oil and natural gas, oil shale and tar sands.

In the context of EW-MFA, the domestic extraction of energy materials/carriers is limited to the extraction of fossil energy carriers.   
This means that primary renewable energy carriers, such as hydro, wind, solar and geothermal energy are not included. However, the materials needed to construct infrastructure for this renewable energy such as hydropower plants, wind turbines, or solar panels are accounted for in the metal or mineral accounts of the country where they are extracted. Additionally, biomass used for energy purposes is reported under the category of biomass.

Local reported data should be converted to tons, as required for the reporting of the EW-MFA material categories A.4.2.1 Crude oil and A.4.2.3 Natural gas liquids. The data used for this estimation were obtained from the Energy Asset Accounts of PSA, which detail the extraction of coal, oil, natural gas, and condensate.

The conversion factors used were based on the Approximate Conversion Factors of the Statistical Review of World Energy, July 2021 update², as cited by BP³.

Natural gas production was converted from cubic feet of gas to cubic meters and then multiplied by its conversion factor. 

PHYSICAL TRADE

The categories are designed to align closely with those used for domestic extraction. However, a few additional categories have been included such as live animals and products, mixed complex products, and waste for final treatment and disposal. These additions aim to capture a wider range of goods that have undergone some level of processing, as well as certain manufactured goods that consists primarily of specific material categories. For example, while DE may only accounts for wood as it is extracted from the environment, the trade account will also include processed wood and wood products.

The methodology involved bridging the EW-MFA categorization with the Philippine Standard Commodity Classification as outlined in the EW-MFA manual⁴. 

HEADLINE INDICATORS

The Direct Material Input (DMI) measures the direct input of materials into the economy. It includes all materials of economic value extracted from the country’s natural environment (DE) or imported from the rest of the world (IM) to be used in the economy’s production systems.

Domestic Material Consumption measures the total amount of material directly used in an economy. The DMC is equal to the DMI less exports. It is important to note that indirect flows are excluded. 

The Physical Trade Balance (PTB) measures a country's physical trade surplus or deficit. It is calculated as imports less exports.

Material Productivity measures productivity as the ratio between Gross Domestic Product (GDP) and DMC. It presents the economic value produced per unit of material consumption. The indicator shows whether the decoupling of material use from economic growth is achieved over time. It is also referred to as resource efficiency. 

Material Intensity measures the material consumption required to produce one unit of GDP. It is the reciprocal of material productivity.  

The table below shows the physical and use table which is the core account for economy-wide material flow account (SEEA CF).

SDG Indicators

The EW-MFA provides valuable information for monitoring progress on SDG Target 8.4 “Improve resource efficiency in consumption and production” and Target 12.2 “Sustainable management and use of natural resources”. Domestic material consumption, one of the headline indicators derived from the EW-MFA, corresponds to SDG indicator 8.4.2 (and 12.2.2, repeating indicator). It measures the total amount of materials directly used in an economy. 
 

Limitations

The current report focuses only on domestic extraction, imports, and exports. Information about the domestic processed output such as emissions to air, waste landfilled, emissions to water, dissipative losses, and dissipative use, will be included in future publication once data becomes available.

If fully implemented to include raw material equivalents of products, the EW-MFA can also be used to derive SDG indicator 8.4.1 (and 12.2.1, repeating indicator), which pertains to Material Footprint. 
 

IV.    Definition of Terms

a.    Biomass - Comprises organic non-fossil material of biological origin. It only includes generated biomass within the environment by a natural process which is outside human control and generated biomass by cultivation process which takes place under human control. Biomass generated by cultivation process is treated differently in EW-MFA and SEEA conceptual framework. 

b.    Crop Residues - Residual biomass of primary crop harvest.

c.    Direct Material Input - Measures the direct flows of materials that physically enter the economic system as an input, i.e. materials that are of economic value and that are used in production and consumption activities. In economy-wide material flow accounting DMI equals domestic extraction plus imports.

d.    Domestic Extraction - The amount of used material inputs from the environment to the economy. It includes the used extraction of material extracted from the environment by the humans and excludes unused extraction. Domestic extraction can be broken down into four categories namely: Biomass, Metal Ores, Non-metallic minerals, and fossil fuels.

e.    Domestic Material Consumption - Measures the mass (weight) of the materials that are physically used in the consumption activities of the domestic economic system (i.e. the direct apparent consumption of materials, excluding indirect flows). In economy–wide material flow accounting DMC equals DMI minus exports, i.e. domestic extraction plus imports minus exports.

f.    Domestic Processed Output - Measures the mass (weight) of materials that physically leave the domestic economic system after use in production and consumption activities as an output to the domestic environment, i.e. as residuals. Included in DPO are emissions to air, industrial and household wastes deposited in landfills, material loads in wastewater and materials dispersed into the environment as a result of product use (dissipative flows). These flows occur at the processing, manufacturing, use, recovery, and final disposal stages of the economic production-consumption chain.

g.    Economy - A general equilibrium system in which interdependent economic activities involving countless transactions between different institutional units are carried out simultaneously.

h.    Economy-wide - The term “economy-wide” is used in material flow analysis to designate MFA tools that cover the entire range of materials exchanged at the boundary of the national economy and whose results can be used to provide an aggregate overview of annual material inputs and outputs of an economy.

i.    Economy-wide Material Flow Accounts (EW-MFA) - The term "economy-wide" is used to qualify MFA that cover the national economy as a whole (black box), and that track the physical flows of the entire range of natural resources and materials exchanged at the boundary of the national economy. An important feature of EW-MFA is that they are complete as regards the materials covered, with the exception of water, and that all materials are recorded in a common physical unit. They thus usually provide a fairly detailed database that can be used to provide both an aggregate overview of annual material inputs and outputs of an economy, and a basis for in-depth material flow studies and analyses.

j.    Emissions to Air - Gaseous or particulate materials released to the atmosphere from production or consumption processes in the economy. 

k.    Emissions to Water – Substances released to water resources by establishments and households as a result of production, consumption, and accumulation processes. Emissions to water resources can constitute a major environmental problem and cause the quality of water to deteriorate. 

l.    Fossil Fuels - Flows of natural inputs of fossil energy, such as coal, peat, petroleum, and natural gas. Whereas energy statistics/balances show a comprehensive picture of the supply and use of all energy carriers, the domestic extraction of energy materials/carriers in EW-MFA is limited to the extraction of fossil energy carriers only. While in the SEEA energy accounts measurement is in joules, in the EW-MFA measurement is in mass.

m.    Grazed biomass - Biomass directly grazed by livestock.

n.    Material Footprint - Also known as Raw Material Consumption. It measures the total amount of raw materials extracted to meet a country’s consumption demands.

o.    Material Productivity - The ratio between gross value added (at constant prices) and the domestic material consumption of a country (GDP/DMC). It describes the amount of materials consumed in an economy to generate one unit of gross domestic product, excluding the materials that have been incorporated in exports.

p.    Metal Ores - Recorded in terms or gross ore, based on the chemical classification as a metal in the periodic table of elements. 

q.    Non-metallic minerals - Flows of minerals that are non-metallic based on their chemical classification such as marble, limestone, sand, and gravel. It excludes the extraction of gases from the atmosphere for industrial purposes. 

r.    Ore Grade - This is the estimated volume weighted average concentration for the current component in the current ore stream, averaged over the relevant year, as it enters beneficiation or as it is sold.

s.    Physical Imports and Exports - Product flows between the economy of concern and the rest of the world. It records products weight and based on categories used for domestic extractions.

t.    Physical Trade Balance - The physical trade balance reflects the physical trade surplus or deficit of an economy. It is defined as imports minus exports.

u.    Primary crop - Primary harvest of all crops from arable land and permanent cultures.

v.    Raw materials - Materials extracted from the environment.

w.    Recovery rate, crop residues - Used to extrapolate the fraction of used residues.

x.    Recovery factor - The percentage of the total metal contained in the ore entering the processing plant which is retained in the metal concentrate. Where the ore is merely shipped rather than processed, this factor should always be approximately 100 percent, however virtually any beneficiation process will lead to some loss of contained metal, and in many cases that loss can be over 50 percent.

y.    Wild harvest - Fish capture (including recreational fishing) and extraction of other aquatic animals and plants extracted from unmanaged fresh and seawater systems. 

z.    Wood - Comprised of timber or industrial roundwood and fuelwood. It includes wood harvest from forests and also from short rotation plantations or agricultural land. 
 

_{Sources:  
     Measuring Material Flows and Resource Productivity: OECD guidance  
                  Manual (OECD, 2008) 
     System of Environmental – Economic Accounting (SEEA) 2012 Central  
Framework 
     SEEA Technical Note: Economy-wide Material Flow Accounts 
     Eurostat manual on Economy-wide material flow accounts 
     UNEP (2021). The use of natural resources in the economy: A Global Manual          
                  on Economy Wide Material Flow Accounting. Nairobi, Kenya.}

V.    Dissemination of Results and Revision 
Starting with this Special Release, the Economy-Wide Material Flow Accounts will be updated and released annually on the PSA website. The materials available on the website include a press release, statistical tables, technical notes, highlights, infographics, and social cards.  
 

VI.    Citation

Philippine Statistics Authority. (20 December 2024). Technical Notes on Material Flow Accounts
https://psa.gov.ph/content/domestic-material-consumption-amounted-42700-million-metric-tons-2023  

VII.    Contact Information

Ms. Virginia M. Bathan
Chief Statistical Specialist 
Environment and Natural Resources Accounts Division
8376-2041
enrad.staff@psa.gov.ph

For data request, you may contact:
Knowledge Management and Communications Division
(632) 8462-6600 locals 839, 833, and 834
info@psa.gov.ph