Retail sale in non-specialized stores leads among industries
Preliminary results of the 2010 Annual Survey of Philippine Business and Industry (ASPBI) showed that the Philippines had a total of 4,762 establishments with total employment (TE) of 20 and over engaged in Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles. As shown in Figure 1, retail sale in non-specialized stores, garnered the highest with 770 establishments or 16.2 percent of the total number. Retail sale of other household equipment in specialized stores ranked second with 595 establishments (12.5%). A close third was wholesale of household goods with 570 establishments (12.0%). (Table 1)
More than half of the establishments are located in the National Capital Region (NCR)
Regional distribution of the establishments showed that NCR, being the center of business and trade of the country had the most number of establishments with 2,576 (54.1 %). Neighboring regions of CALABARZON placed second with 417 establishments (8.8%) followed by Central Visayas with 331 establishments (6.9%). Autonomous Region in Muslim Mindanao (ARMM) had the least with only 5 establishments. (Table 2)
Wholesale and retail trade establishments employ 308 thousand workers in 2010
Employment in 2010 reached a total of 307,715. Almost all or 99.6 percent were paid employees and the rest were working owners and unpaid employees.
One-third of the total workforce of the section was hired by retail sale in non-specialized stores establishments with 103,618 (33.7%) employees. Wholesale of household goods generated second highest employment with 40,353 employees (13.1%) followed by retail sale of other household equipment in specialized stores with 24,191 employees (7.9%). The least number of 325 employees were engaged in non-specialized wholesale trade.
Among regions, NCR was the top employer with 169,315 employees (55.0%) hired. Central Visayas followed with 23,870 (7.8%). ARMM employed the least with only 200 employees. Figure 2 shows the distribution of employment by industry group.
Labor payments reach to PHP55.1 billion
The section, Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles paid a total compensation of PHP55.1 billion, an equivalent of PHP179,797 average annual compensation.
By industry group, wholesale of household goods paid the highest compensation to its employees amounting to PHP12.5 billion or 22.8 percent of the total. Next is retail sale in non-specialized stores paying PHP12.0 billion (21.8%) and the third is wholesale of machinery, equipment and supplies disbursing PHP6.4 billion (11.7%).
Table 2 shows that labor payments in NCR amounted to PHP40.4 billion (73.3%), about three-fourths of compensation nationwide. CALABARZON, which expended around PHP3.4 billion (6.2%), came next. ARMM was the least payer with only PHP9.7 million.
Wholesalers highest earners in 2010
Wholesale establishments provided highest compensation to its employees in 2010. Top four industries that received highest annual remuneration were the following: wholesale of household goods, PHP311,284; wholesale of machinery, equipment and supplies, PHP288,514; Wholesale of agricultural raw materials and live animals, PHP259,617; and non-specialized wholesale trade, PHP251,182.
The average annual compensation generated by wholesalers and retailers was PHP179,797 or an equivalent monthly compensation of PHP14,983. Ten industries surpassed the national average. Across regions, NCR workers received the highest average monthly compensation payments of PHP19,914. Figure 3 shows the leading industries with highest average annual compensation.
Total revenue amounts to PHP1.6 trillion; retail sale in non-specialized store generates the largest
Gross revenue earned in 2010 for the section reached PHP1.6 trillion. Wholesale trade establishments generated PHP844.8 billion, more than half (51.8%) of the total revenue. On the other hand, retail trade establishments earned PHP616.1 billion.
Among industries, retail sale in non-specialized store generated the highest revenue of PHP321.7 billion, which comprised 19.7 percent of the total. Wholesale of household goods followed closely at PHP314.4 billion or 19.3 percent. Retail trade not in stores, stall or market generated the least revenue with only PHP1.0 billion.
With respect to regions, NCR accounted for nearly two-thirds of the total revenue of the section amounting to PHP1.0 trillion (63.6%). Neighboring regions of CALABARZON and Central Luzon generated revenues exceeding the billion mark at PHP140.9 billion and PHP139.7 billion respectively.
Operational costs reach PHP1.5 trillion
Cost for operating the wholesale and retail trade establishments less compensation totaled to PHP1.5 trillion. Five industries that surpassed the PHP100 billion mark were the following: retail sale in non-specialized stores at PHP 298.4 billion (19.8%); wholesale of household goods at PHP262.6 billion (17.4%); other specialized wholesale at PHP197.6 billion (13.1%); wholesale of food, beverages and tobacco at PHP154.4 billion (10.2%) and sale of motor vehicles at PHP131.9 billion (8.8%).Across regions, NCR remained on top in terms of expenditures. Figure 4 shows the distribution of revenue and cost by industry group for the section in 2010.
Revenue per peso cost at 1.08 in 2010
In 2010, Wholesale and Retail Trade establishments generated a revenue per peso cost of 1.08, which means that for every peso spent by the establishment PHP1.08 was generated. Ten out of 19 industries surpassed the national level ratio. Maintenance and repair of motor vehicles posted the highest revenue-cost ratio of 1.32 among industries.
At the regional level, CAR had taken the top spot at 1.13 revenue-cost ratio followed by ARMM with 1.12. Region IVA and Region XII tied at third posting 1.11.
Value added amounts to PHP187.1 billion
Value added is defined as gross output minus intermediate cost or the spread between the value of goods/services produced and intermediate consumption. During the survey period, value added of Wholesale and Retail Trade section was estimated at PHP187.1 billion. Top three industries contributed more than half (55.4%) of the total value added generated by the section, namely: wholesale of household goods with PHP53.1 billion (28.4%); retail sale in non-specialized stores with PHP31.8 billion (17.0%) and wholesale of food, beverages and tobacco with PHP18.8 billion (10.1%). Likewise, on the regional level, NCR contributed the largest value added of PHP129.4 billion or more than two-thirds (69.2%) of the total value added of the section.
Employees of wholesale of household goods establishments are the most productive
Value added per worker, a measure of labor productivity, stood at PHP608.1 thousand for the Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles section. Workers of wholesale of household goods establishments were the most productive with PHP1,316.0 thousand, more than twice the national average. Figure 5 shows the value added per worker by industry group of the section for 2010.
Gross margin reaches PHP266.1 billion
Gross margin or trade margin, the gross output of the section in 2010 reached PHP266.1 billion. Wholesale of household goods led as the top grosser contributing the highest among industries with PHP77.7 billion (29.2%). Retail sale in non-specialized stores followed with PHP49.5 billion (18.6%) and wholesale of food, beverages and tobacco came in third with PHP24.8 billion (9.3%). The percent distribution of industries to gross margin is shown in Figure 6.
Gross additions to tangible fixed assets accumulates to PHP11.9 billion
Gross additions to tangible fixed assets in 2010 for the section totaled to PHP11.9 billion. Top five industries contributed nearly eighty percent of the total. The following industries were: retail sale in non-specialized stores, wholesale of household goods, wholesale of machinery, equipment and supplies, other specialized wholesale and wholesale of food, beverages and tobacco.
NCR, the leading region accounted for more than fifty percent (52.2%)of the total gross additions to tangible fixed assets while Central Luzon and Western Visayas contributed twenty-two percent only.
Total change in inventory values at PHP36.0 billion
Change in inventories, defined as the value of ending inventory less beginning, amounted to PHP36.0 billion for the section in 2010. Among industries of the section, wholesale of agricultural raw materials and live animals recorded the highest with PHP20.0 billion, while three industries reported negative inventories amounting to PHP1.4 billion. Still, NCR recorded the highest change in inventories at PHP 29.1 billion.
Government grants PHP28.8 billion worth of 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. For 2010, a total of PHP28.8 billion was granted to wholesale of agricultural raw materials and live animals and wholesale on a fee or contract basis.
The 2010 Annual Survey of Philippine Business and Industry (ASPBI), conducted in 2011 with 2010 as reference year, is one of the continuing activities of the National Statistics Office. It will be a source of benchmark levels on the structure and trends of economic activities in the country for the year 2010. Particularly, the data from ASPBI will be used in constructing national and regional income accounts in the country, determining and comparing regional economic structures, and formulating plans and policies of the government in the attainment of economic goals..
The conduct of the ASPBI is governed by legislative acts and presidential directives, specifically Commonwealth Act No. 591 which was approved on August 19,1940..
Scope and coverage
The 2010 ASPBI covered establishments engaged in 18 economic sections classified under the 2009 Philippine Standard Industrial classification (PSIC) namely:
- Agriculture, Forestry and Fishing
- Mining and Quarrying
- Electricity, Gas, Steam and Air Conditioning Supply
- Water Supply, Sewerage, Waste Management and Remediation Activities
- 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, Scientific and Technical Services
- Administrative and Support Service Activities
- Human Health and Social Work Activities
- Arts, Entertainment and Recreation
- Other Service Activities
The scope of the ASPBI was confined to “formal sector” only, which consists of the following:
- Corporations and partnership
- Cooperatives and foundations
- Single proprietorships with employment of 10 or more
- Single proprietorships with branches
Like all other establishment surveys conducted by the NSO, the 2010 ASPBI used establishment as the unit of enumeration. It is defined as “an economic unit under a single ownership or control, i.e. under a single legal entity, engaged in one or predominantly one kind of economic activity at a single fixed location.”.
Classification of Establishments
Before the actual selection of samples, the establishments listed in the frame were classified based on economic organization (EO), legal organization (LO), industrial classification, employment size, and geographic location.
Economic organizations relates to the organizational structure or role of the establishment in the organization. The following are the types of economic organization:
- Single establishment is an establishment which has neither branch nor main office
- Branch only is an establishment which has a separate main office located elsewhere
- Establishment and main office, both located in the same address and with branches elsewhere
- Main office only is the unit which controls, supervises and directs one or more establishments of an enterprise
- Ancillary unit other than main office is the unit that operates primarily or exclusively for a related establishment or group of related establishments or its parent establishment and provides goods or services that support but do not become part of the output of those establishments
The legal organization provides the legal basis for ownership of the establishment. The following are the types of legal organization:
- Single Proprietorship refers to a business establishment organized, owned, and managed by one person, who alone assumes the risk of the business enterprise. The establishment name is that of a person, or it has words such as Owner, Proprietor or Operator
- Partnership refers to an association of two or more individuals for the conduct of a business enterprise based upon an agreement or contract between or among them to contribute money, property or industry into a common fund with the intention of dividing profits among themselves. The establishment name includes words such as Owners , Partners, Limited or LTD., Associates or ASSOCS
- Government Corporation is a private corporation organized for private aim, benefit or purpose and owned and controlled by the government. The establishment name included words such as Corporation or CORP., INCORPORATED or INC
- Private Corporation is a corporation organized by private persons. The establishment name includes words such Corporation or Corp, Incorporated or INC
- Cooperative the establishment name includes words such as Cooperative or COOP
The industrial classification of an economic unit is determined by the activity from which it derives its major income or revenue. The 2009 PSIC is utilized to classify units according to their economic activities.
The 2009 PSIC consists of an alpha character and 5 numeric digits. The alpha character, which represents the major division, is denoted by the characters A to S. The first two numeric digits represent the division; the first three numeric digits, the group; the first four digits, the class; and the 5 digits, the sub-class.
The size of the establishment is determined by its total employment (TE). The following are the employment size classification used in the 2010 ASPBI:
0 1 - 4 5 100 - 199 1 5 - 9 6 200 - 499 2 10 - 19 7 500 - 999 3 20 - 49 8 1000 - 1999 4 50 - 99 9 2000 and Over TE Code Total Employment TE Code Total Employment
The geographic or physical location of the establishments was classified in accordance with the Philippine Standard Geographic Code (PSGC) as of December 31, 2010 which contains the latest updates on the number of regions, provinces, cities, municipalities and barangays in the Philippines.
The geographic domains of the 2010 ASPBI for establishments with TE of 20 and over are the 17 administrative regions while the whole country serves as the geographic domain for establishments with TE of less than 20.
Hence, the samples of the 2010 ASPBI with TE of 20 and over shall provide data for 17 administrative regions. For samples with TE of less than 20, the data that will be presented is limited only at the national level.
A total of 477 or 92.4 percent of sample establishments responded. These include receipts of “good” questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
CONCEPTS AND DEFINITIONS OF TERMS
Economic activity or business is the activity of the establishment as classified under the 2009 Philippine Standard Industrial Classification (PSIC). Generally, the main activity of the establishment is the establishment's principal source of income. If the establishment is engaged in several activities, its main activity is that which earns the biggest income or revenue.
Total employment is the number of persons who worked in or for this establishment as of November 15, 2010.
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, workers receiving pure commissions only, and workers on indefinite leave.
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.
Revenue is the value of goods, products/by-products sold and/or services rendered to others whether paid in cash or is considered receivable by the establishment. Valuation of products/by products sold should be in producer’s price (ex-establishment), net of discounts and allowances, including duties and charges but excluding subsidies. It also include goods transferred and/or services rendered to other establishment belonging to the same enterprise as the said establishment which should be treated as sales or as if sold to a customer; and revenue from products on a contractual basis from materials supplied by the establishment.
Cost refers to all expenses excluding compensation incurred during the year whether paid or payable. Valuation should be at purchaser price including taxes and other charges, net of discounts, rebates, returns and allowances. Goods received from and services rendered by other establishment of the same enterprise are valued as though purchased.
Cost of goods sold represents the sum of the total value of goods purchased for resale and beginning inventory of goods for resale less ending inventory of goods for resale.
Gross Margin refer to 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 purchased of goods intended for sale adjusted for stock change of these goods during the inquiry period.
Valued added is gross output less intermediate cost.
Gross output ( for monetary intermediation and Other financial service activities, except insurance and pension funding activities ) is equal to the sum of total revenue (less interest income, rent income from land, dividend income, royalty income and franchise income), capital expenditures of fixed assets produced on own account.
Gross output ( for insurance and pre-need plan activities ) is equal to the sum of total revenue less rent income from land, delivery charges separately invoiced to customers, royalty income and franchise income) less insurance claims paid plus capital expenditures of fixed assets produced on own account.
Gross output ( for other financial and insurance activities industries ) is equal to the sum of total revenue less rent income from land, delivery charges separately invoiced to customers, royalty income and franchise income) less insurance claims paid plus capital expenditures of fixed assets produced on own account.
Intermediate cost is equal to the sum of the following cost items: materials and supplies; fuels, lubricants, oils and greases; electricity and water; cost of industrial services done by others; cost of non-industrial services done by others (less rent expense for land); research and experimental development expense; environmental protection expense; royalty fee; franchise fee and other cost; less change in inventory of materials and supplies; fuels, lubricants, oils and greases.
Tangible fixed assets are physical assets expected to have productive lives of more than one year and intended for use and/or being used by the establishment. Included are land, buildings, other structures and land improvements, transport equipment, machinery and equipment, furniture, fixtures, and other fixed assets.
Book value of tangible fixed assets is the initial value or acquisition cost of tangible fixed assets less the accumulated depreciation.
Gross additions to tangible fixed assets is the sum of cost of new and used fixed assets acquired during the year, cost of alteration and improvements done by others and cost of fixed assets produced by the establishment less the value of sales of fixed assets during the year.
Inventories refer to the stocks of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation should be at current replacement cost in purchaser’s price at the indicated dates. Replacement cost is the cost of an item in terms of its present price rather than its original price.
Change in Inventories is equivalent to the value of inventories at the end of the year less the value at the beginning of the year.
Subsidies are special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry or production and to protect it against competition.
Source: National Statistics Office