Credit cooperative activities dominates the sector
Final results of the 2015 Annual Survey of Philippine Business and Industry showed that a total of 7,172 establishments in the formal sector of the economy were engaged in Financial and Insurance Activities.
Credit cooperative activities covered 2,351 establishments or 32.8 percent of the total number of establishments. Lending investor companies followed with 1,241 establishments or 17.3 percent. Ranked third was pawnshop operations with 1,106 (15.4%). Figure 1 shows the distibution of establishments by industry sub-class.
Expanded commercial banking (universal banking) industry hires the highest number of workers
The sector hired a total of 338,163 employees in 2015. Of the total employees, almost all (99.2%) were paid employees and the rest were working owners or unpaid workers.
Expanded commercial banking (universal banking), employed more than a fourth of the total number of workers (86,495 or 25.6%). Credit cooperative activities placed far second with 34,773 employees (10.3%). Ranked third was pawnshop operations with 28,204 employees or 8.3 percent. Figure 2 displays the distribution of employment by industry sub-class.
Average number of workers was 47 per establishment. Expanded commercial banking (universal banking) surpassed the national average with 4,805 workers per establishment. Specialized government banking also was on the thousand mark with 3,338 workers per establishment. Far third in terms of employment per establishment was regular commercial banking with 560 workers. The lowest was reported by establishments in foreign exchange dealing with six workers per establishment.
Activities of holding companies and securities dealership, own account are the highest-paid employees
In 2015, the sector paid a total compensation of PHP186.4 billion, equivalent to an average annual compensation of PHP555.9 thousand per employee.
Industry-wise, expanded commercial banking (universal banking) paid the highest compensation of PHP70.1 billion (37.6%). Activities of holding companies placed a far second with PHP11.8 billion or 6.3 percent. Regular commercial banking ranked third with PHP11.5 billion or 6.2 percent. On the other hand, mutual building and loan association operation industry recorded the lowest amount of PHP17.1 million (0.01%).
Workers in activities of holding companies and security dealership, own account activities were the highest paid employees. They received an average annual compensation of PHP1.5 million per annum, surpassing the sector’s average of PHP555.9 thousand per annum. However, those employed in lending investor activities were paid only PHP180.5 thousand per annum. Figure 3 shows the average compensation of paid employees by industry sub-class.
Expanded commercial banking (universal banking) activities contributes the biggest share in income and expense
Gross income realized by the sector reached PHP1.4 trillion in 2015. Expanded commercial banking (universal banking) had the biggest share with PHP373.2 billion or 25.8 percent of the total income. Activities of holding companies ranked second with PHP273.2 billion (18.9%). Life insurance ranked third with PHP216.0 billion (14.9%).
Total expense incurred amounted to PHP967.0 billion in 2015. Being the major contributor in income, expanded commercial banking (universal banking), also had the largest proportion in expense with PHP268.7 billion (27.8%). Ranked second in expense was life insurance with PhP185.8 billion or 19.2 percent. In third place was activities of holding companies with expense of PHP90.1 billion or 9.3 percent. However, mutual benefit association operation incurred the lowest expense of PHP65.1 million (0.01%). Figure 4 presents the top five industry groups in income and expense of the sector for 2015.
Income per peso expense stands at 1.50
The sector generated an income per expense ratio of 1.50. This means that for every peso spent, a corresponding income of PHP1.50 was generated.
Across industries, investment company operation recorded the highest and surpassed the national average of 4.21 while mutual building and loan association operation recorded the least income per expense ratio of 1.01.
Value added amounts to PHP759.0 billion
Value added realized by Financial and Insurance Activities sector totaled PHP759.0 billion in 2015.
Industry-wise, activities of holding companies registered the highest value added with PHP206.4 billion (27.2%). Expanded commercial banking (universal banking) ranked second with PHP202.8 billion (26.7%) and life insurance ranked third with PHP53.8 billion (7.1%). On the other hand, mutual building and loan association operation recorded the least with PHP39.7 million (0.01%).
Activities of holding companies has the highest labor productivity
Value added per employee, a measure of labor productivity, was estimated at PHP2.2 million in 2015. Activities of holding companies led the sector with PHP26.7 million. Ranked far second was financial leasing with PHP14.5 million. On third place was administration of financial markets with PHP6.7 million. On the other hand, lending investor activities reported the lowest with PHP278.1 thousand. Figure 5 exhibits the labor productivity of the top five industries.
Gross additions to fixed assets reaches PHP29.4 billion
Gross additions to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP29.4 billion in 2015.
Expanded commercial banking (universal banking) acquired the highest gross additions to fixed assets with PHP12.1 billion (41.2%). This was followed by activities of holding companies with PHP6.3 billion (21.5%). Specialized government banking activities ranked far third with PHP2.9 billion (10.0%).
Expanded commercial banking (universal banking) records the highest change in inventories
Total change in inventories (ending less beginning inventory) yielded a total of PHP863.0 million in 2015. Expanded commercial banking recorded the highest change in inventories with PHP704.5 million. This was followed by pawnshop operations with PHP342.9 million. Savings and mortgage banking was third with PHP69.0 million. Other industries with more than a million inventories include the following industries;
- Regular rural banking, PHP61.3 million,
- Lending investor companies, PHP29.2 million,
- Pre-need plan for pension,PHP3.2 million,
- Other activities auxiliary to insurance and pension funding, PHP2.0 million,
- Investment house operation, PHP1.8 million,
- Other activities auxiliary to financial service activities, PHP1.7 million, and
- Pre-need plan for health, PHP 1.2 million.
Total subsidies received from the government amounts to PHP2.1 billion
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. Total subsidies received by the sector from the government amounted to PHP2.1 billion in 2015.
Only five industries received subsidies from the government. These were the following;
- Non-life insurance, PHP1.3 billion,
- Financing company operations, PHP750.0 million
- Lending investor activities, PHP90.6 million,
- Other credit granting, n.e.c., PHP7.7million, and
- Credit cooperative activities, PHP3.2 million.
This Special Release presents the final results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI) for all Financial and Insurance Activities establishments.
The 2015 ASPBI is one of the designated statistical activities of the Philippine Statistics Authority (PSA). Data collected from the survey provide information on the levels, structure, performance, and trends of economic activities of the formal sector in the entire country for the year 2015. The 2015 Survey of Information and Communications Technology (SICT) was undertaken as a rider to this survey.
The survey was conducted nationwide in 2016 with 2015 as the reference period, except for employment where the reference period is November 15, 2015.
Establishment Data Management System (EDMS) was still utilized in the decentralized processing of 2015 ASPBI questionnaires in the province as well as the online accomplishment of questionnaire through the PSA website.
Data are presented at the national sub-class or 5-digit 2009 Philippine Standard Industrial Classification (PSIC)..
The conduct of the 2015 ASPBI is authorized under Republic Act 10625 known as the Philippine Statistical Act of 2013 - Reorganizing and Strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.
Scope and Coverage
The 2015 ASPBI covered establishments engaged in 18 economic sectors classified under the 2009 PSIC, namely:
- Agriculture, Forestry and Fishing (A)
- Mining and Quarrying (B)
- Manufacturing (C)
- Electricity, Gas, Steam, and Air Conditioning Supply (D)
- Water Supply; Sewerage, Waste Management and Remediation Activities (E)
- Construction (F)
- Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles (G)
- Transportation and Storage (H)
- Accommodation and Food Service Activities (I)
- Information and Communication (J)
- Financial and Insurance Activities (K)
- Real Estate Activities (L)
- Professional, Scientific and Technical Activities (M)
- Administrative and Support Service Activities (N)
- Education (P)
- Human Health and Social Work Activities (Q)
- Arts, Entertainment and Recreation (R)
- Other Service Activities (S)
The survey was confined to the formal sector of the economy, which consists of the following:
- Corporations and partnerships
- Cooperatives and foundations
- Single proprietorship with employment of 10 and over
- Single proprietorship with branches
Hence, the 2015 ASPBI covered only the following economic units:
- All establishments with total employment (TE) of 10 or more, and;
- All establishments with TE of less than 10, except those establishments with Legal Organization = 1 (single proprietorship) and Economic Organization = 1 (single establishment), that are engaged in economic activities classified according to the 2009 Philippine Standard Industrial Classification (PSIC).
Frame of Establishments
The frame for the 2015 ASPBI was extracted from the 2015 List of Establishments (LE). The estimated number of establishments in operation in the country in 2015 totaled to 909,786. About 259,386 establishments (29.0% of the total establishments) belong to the formal sector of which 223,821 (86.3%) comprised the establishment frame. This frame was used to draw the sample establishments for the survey.
Unit of Enumeration
The unit of enumeration for the 2015 ASPBI is the establishment. An establishment is defined as an economic unit under a single ownership or control which engages in one or predominantly one kind of activity at a single fixed location.
Classification of Establishments
An establishment is categorized by its economic organization, legal organization, industrial classification, employment size and geographic location.
Economic Organization refers to the organizational structure or role of the establishment in the organization. An establishment may be single establishment, branch, establishment and main office with branches elsewhere, main office only, and ancillary unit other than main office.
Legal Organization refers to the legal form of the economic entity which owns the establishment. An establishment may be single proprietorship, partnership, government corporation, stock corporation, non-stock corporation, and cooperative.
Industrial Classification of an economic unit was determined by the activity from which it derives its major income or revenue. The 2009 PSIC which was approved for adoption by government agencies and instrumentalities through NSCB Resolution No. 2 Series 2010 was utilized to classify economic units according to their economic activities.
Size of an establishment is determined by its total employment (TE) as of specific date. Total employment (TE) refers to the total number of persons who work in or for the establishment.
This includes paid employees, working owners, unpaid workers and all employees who work full-time or part-time including seasonal workers. Included also are persons on short term leave such as those on sick, vacation or annual leaves and on strike.
Geographic Classification refers to the grouping of establishments by geographic area using the Philippine Standard Geographic Code (PSGC) classification. The PSGC contains the latest updates on the official number of regions, provinces, cities, municipalities, and barangays in the Philippines. The PSGC as of December 31, 2015 was used for the 2015 ASPBI.
The 2015 ASPBI uses a stratified systematic sampling with 3-digit or 5-digit PSIC serving as industry strata and employment size as the second stratification variable. The selection of sample establishments is done independently by stratum using systematic sampling.
Estimation Procedure for Establishments with TE of Less Than 20
a. Non-Certainty Stratus
The estimate of the total of a characteristic for the non-certainty employment stratum TE less than 20 in the sth industry domain is
s = denotes the non-certainty employment strata in TE of less than 20
Xsj = value of the jth establishment in non-certainty employment stratum in TE of less than 20 in Sth industry domain
j = 1,2,3..., ns establishments
Wsj = weight of the jth establishment in the non-certainty employment stratum of less than 20 in the sth industry domain
Ns = total number of establishments in the non-certainty employment stratum in TE of less than 20 in the sth industry domain
ns = number of sample establishments in the non-certainty employment stratum in TE of less than 20 in sth domain
b. Certainty Stratum
The total of a characteristic for the certainty employment stratum in the Cth industry domain was
c = denotes the certainty employment strata in TE of less than 20 in the cth industry
xcj = value of the jth establishment in the certainty employment strata in TE of less than 20 in the cth industry domain
j = 1,2,3,..., mc establishments
mc = number of establishments in the certainty employment strata in TE of less than 20 in the cth industry domain
c. Total Estimate for TE of Less Than 20
For all sections, except B and C, national level estimates of the total of a characteristicfor the industry domain was obtain by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,
where d denotes the industry domain.
Estimation Procedure for Establishments with TE of 20 and Over
a. Non-Certainty Stratum (strata of TE 20 to 49 and TE 50 to 99) for Sections A,C,E,F,G, H, I, J, K, L, M, N, P, Q, R and S.
The estimate of the total of a characteristic for the non-certainty employment strata in TE of 20 and over for an industry domain in each region
s = denotes the non-certainty employment strata in TE of 20 to 49 and TE 50 TO 99
p = 1, 2,..., 18 regions (geographic domains)
Xspj = value of the jthestablishment in the non-certainty employment strata with TE of 20 to 49 and TE 50 to 99 for an industry domain in each region
j = 1,2,3,..., nsp establishments
Wspj = weight of the jth establishment in the non-certainty employment strata with TE of 20 to 49 and TE 50 to 99 for an industry domain in each region
Nsp = total number of establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
nsp = number of sample establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
b. Certainty Stratum (Establishments under the following: Section B and D, ICT core industries, BPM industries, GOCC's and with TE 100 and over)
c = denotes the certainty employment strata in TE of 20 and over
p = 1,2,...18 regions (geographic domains)
Xcpj = value of the jthestablishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region
j = 1,2,3,..., mcp establishments
mcp = number of establishments in the certainty employment strata in TE of 20 and over in an industry domain within each region
c. Total Estimate for TE of 20 and Over
The estimate of the total of a characteristic for the industry domain in each region (geopraphic domain) was obtained by aggregating the estimated for all employment strata (non-certainty and certainty) in the same industry domain,
where dp denotes the industry domains in each region
National level estimate of the the characteristic by industry domain were obtained by aggregating separately the estimates for the particular industry domain from all the regions,
Weight Adjusment Factor for Non-Response
To account for non-response in the non-certainty strata, the adjusment factors, and (n/n') was multipled with the sampling weight (W) of each of the sampling unit. The sampling weight which is defined as N/n was recomputed as
Thus, the adjusted weight (W'spj) for the non-certainty employment stratum for the industry domain with TE 20-99 was
Nsp = total number of establishments in the non-certainty employment stratum with TE 20-99 for the industry domain within each geographic domain (region)
n'sp = number of responding establishments in the non-certainty employment stratum with TE of 20-99 for the industry domain within each geographic domain (region)
Total response rate for Financial and Insurance Activities sector for all sizes was 98.4 percent (1,508 out of 1,533 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, 81 establishments responded online.
Reports of the remaining non-reporting establishments were taken from other available administrative data sources and financial statements from Securities and Exchange Commission (SEC). However, there were establishments which were found to be duplicates, out-of-scope and out of business in 2015.
Limitation of Data
Only the formal sector was covered in the survey.
Concepts and Definitions of Terms
Establishment is as an economic unit under a single ownership control, i.e., under a single entity, engaged in one or predominantly one kind of economic activity at a single fixed location.
Economic activity is the establishment’s source of income. If the establishment is engaged in several activities, its main economic activity is that which earns the biggest income or revenue.
Total employment is the number of persons who worked in for the establishment as of November 15, 2015.
Paid employees are all persons working in the establishment and receiving pay, as well as those working away from the establishment paid by and under the control of the establishment. Included are all employees on sick leave, paid vacation or holiday. Excluded are consultants, home workers, receiving pure commissions only, and workers on indefinite leave.
Compensation is the sum of salaries and wages, separation/retirement/terminal pay, gratuities, and payments made by the employer in behalf of the employees such as contribution to SSS/GSIS, ECC, PhilHealth, Pag-ibig, etc.
Salaries and wages are payments in cash or in kind to all employees, prior to deductions for employee’s contributions to SSS/GSIS, withholding tax, etc. Included are total basic pay, overtime pay and other benefits.
Income or Revenue refers to cash received and receivables for goods/products and by-products sold and services rendered. Valuation is at producer prices (ex-establishment) net of discounts and allowances, including duties and taxes but excluding subsidies.
E-commerce refers to the selling of products or services over electronic systems such as Internet Protocol-based networks and other computer networks. Electronic Data Interchange (EDI) network, or other on-line system. Excluded are orders received from telephone, facsimile and e-mails.
Expense refers to cost incurred by the establishment during the year whether paid or payable. This is treated on a consumed basis. Valuation is at purchaser price including taxes and other charges, net of rebates, returns and allowances. Goods and services received by the establishment from other establishments of the same enterprise are valued as though purchased.
Value added is gross output less intermediate input. Computation of gross output for financial and insurance activities sector varies per industry as presented below:
For PSIC K641, K649 is equal to the sum of net interest income (interest income – interest expense); value of industrial services done for others; value of non-industrial services done for others less rent income from land; service charges; dividend income; commission and fees earned; foreign exchange gains; other income; capital expenditures produced on own account.
For PSIC K651, K652, K6623 is equal to the sum of net premiums earned (insurance premium- insurance claims paid); value of industrial services done for others; value of non-industrial services done for others less rent income from land; dividend income; commission and fees earned; other income; capital expenditures produced on own account.
For PSIC 66130 is equal to the sum of foreign exchange gains; value of industrial services done for others; value of non-industrial services done for others less rent income from land; commission and fees earned; other income; capital expenditures produced on own account.
For PSIC K642 is equal to the sum of dividend income; value of industrial services done for others; value of non-industrial services done for other less rent income from land; commission and fees earned; other income; capital expenditures produced on own account.
For PSIC K643,K66210, K66220, K66290, K66300, K661 except K66130 is equal to the sum of commission and fees earned; value of non-industrial services done for others; other income; capital expenditures produced on own account.
Intermediate input is equal to the sum of the following expense items: materials and supplies purchased; fuels, lubricants, oils and greases purchased; electricity purchased, water purchased; industrial services done by others; non-industrial services done by others less rent expense for land; research and development expense; environmental protection expense; royalty fee; franchise fee; foreign exchange losses and other expense.
Change in inventories is equivalent to the value of inventories at the end of the year less the value of inventories at the beginning of the year.
Inventories refer to the stock of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation is at current replacement cost in purchaser prices. Replacement cost is the cost of an item in terms of its present price rather than its original cost.