Other financial service activities, except insurance and pension funding industry leads the sector
Preliminary results of the 2015 Annual Survey of Philippine Business and Industry showed that a total of 1,408 establishments with total employment of 20 and over in the formal sector of the economy were engaged in Financial and Insurance Activities sector.
Other financial service activities, except insurance and pension funding comprised 745 (52.9 %) of the total number of establishments. This was followed by establishments engaged in monetary intermediation with 362 (25.7 %). Ranked third were establishments engaged in insurance activities with 96 (6.8%).
At the regional level, the National Capital Region (NCR) had the most number of establishments with 39.1 percent or 550 establishments. CALABARZON and Central Luzon placed far second and third with 10.4 percent (146) establishments and 9.0 percent (127) establishments, respectively. MIMAROPA had the least in number with only 15 establishments with TE of 20 and over.
Other financial service activities, except insurance and pension funding activities employs the highest number of workers
The sector employed a total of 360,997 workers in 2015. Of the total, almost all (99.8%) were paid employees and the rest were working owners or unpaid workers.
Other financial service activities, except insurance and pension funding activities, employed almost half of the total number of workers (173.5 thousand or 48.1%). Monetary intermediation, placed second with 147,822 employees (41.0%) Ranked far third was insurance with 20,128 3mployees or 5.6 percent.
Region wise, NCR recorded the biggest share in employment comprising more than three fourths (277,381 or 76.8%) of the total workforce. CALABARZON placed far second with 4.9 percent (17,779) and Central Visayas third, with 3.2 percent (11,700). The Cordillera Administrative Region (CAR) registered the least with 1,057 employees.
Average number of workers was measured at 256 per establishment. Monetary intermediation surpassed the national average with 408 workers per establishment. The lowest was reported by establishments in trusts, funds and other financial vehicles with 62 employees per establishment.
Workers in trusts, funds and other financial vehicles are the highest-paid employees
In 2015, the sector paid a total compensation of PHP167.1 billion, equivalent to an average annual compensation of PHP463.9 thousand per paid employee.
Industry wise, monetary intermediation paid the highest compensation of PHP98.8 billion comprising more than half (59.1%) of the total. Other financial service activities, except insurance and pension funding activities placed a far second with PHP33.8 billion or 20.2 percent. Insurance activities ranked third with PHP14.1 billion or 8.4 percent. On the other hand, pension funding industry recorded the lowest amount of PHP121.2 million (0.1%).
Among regions, NCR spent the biggest share in total compensation amounting to PHP148.7 billion (89.0%). CALABARZON and Central Visayas were in second and third place with PHP3.6 billion (2.2%) and PHP3.3 billion (2.0%), respectively.
Workers in trusts, funds and other financial vehicles were the highest-paid employees receiving an average annual compensation of PHP1.7 million per annum surpassing the sector’s average of PHP463.9 thousand per annum. Employees of holding companies and insurance, followed next with PHP1.7 million and PHP700 thousand, respectively. However, those employed in other financial service activities, except insurance and pension funding activities, were paid only PHP195.6 thousand per annum.
Employees working in the NCR received the highest average annual compensation of PHP536.3 thousand while those employed in SOCCSKSARGEN received the lowest with PHP128.3 thousand.
Monetary intermediation activities contributes the biggest share in income and expense
Gross income realized by the sector reached PHP1.1 trillion in 2015. Monetary intermediation had the biggest share with PHP525.4 billion or 45.8 percent of the total. Insurance ranked second with PHP208.0 billion (18.1%). Activities of holding companies ranked third with PHP191.2 billion (16.7%).
Total expense incurred amounted to PHP814.3 billion in 2015. Being the major contributors in income, monetary intermediation and insurance also had the largest proportion in expense with PHP383.3 billion (47.1%) and PHP181.8 billion (22.3%), respectively. However, pension funding activities incurred the lowest expense of PHP282.9 million (0.03%). Figure 4 shows the top five industry groups in income and expense.
At the regional level, NCR had the biggest share in income and expense. It shared PHP1.1 trillion or 91.6 percent in income and PHP755.2 billion or 92.8 percent in expense. Central Visayas and CALABARZON accounted for 3.2 percent and 1.1 percent, respectively in income. The same regions accounted for 1.5 percent and 1.3 percent in expense. Eastern Visayas contributed the least income as well as expense (0.1%).
Income per peso expense stands at 1.41 for 2015
Income per peso expense stood at 1.41 in 2015. Pension funding almost doubled the national average with 2.73 and another industry, activities of holding companies also surpassed the national average for the sector which reported 2.54 income per peso expense. Trust, funds and other financial vehicles was the third highest with 1.48. Monetary intermediation and other financial service activities, except insurance and pension funding activities recorded an income per peso expense of 1.37 and 1.33, respectively.
Value added amounts to PHP568.1 billion
Value added realized by Financial and Insurance Activities sector totaled PHP568.1 billion in 2015.
Industry-wise, monetary intermediation registered the highest value added with PHP282.1 billion (49.7%). Activities of holding companies ranked second with PHP136.2 billion (24.0%) and other financial service activities, except insurance and pension funding activities ranked third with PHP80.1 billion (14.1%). On the other hand, pension funding recorded the least with PHP622.3 million (0.11%).
Across regions, NCR reported the highest value added, amounting to PHP503.0 billion. Central Visayas and CALABARZON came in far second and third with PHP30.1 billion (5.3%) and PHP6.4 billion (1.1%), respectively. Eastern Visayas had the least value added with only PHP500.1 million or 0.1 percent.
Activities of holding companies has the highest labor productivity
Value added per employee, a measure of labor productivity, was estimated at PHP1.6 million in 2015. Activities of holding companies led the sector with PHP23.5 million. Ranked second was trusts, funds and other financial vehicles with PHP3.4 million. On third place was pension funding with PHP3.0 million. On the other hand, the combined activities auxiliary to insurance and pension funding and fund management activities reported the lowest with PHP241.7 thousand.
At the regional level, highest labor productivity was reported in Central Visayas with PHP2.6 million. NCR followed with labor productivity amounting to PHP1.8 million. Ranked third was Zamboanga Peninsula which recorded PHP1.1 million labor productivity.
Gross additions to fixed assets reaches PHP26.5 billion
Gross additions to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP26.5 billion in 2015.
Monetary intermediation activities acquired the biggest gross additions to fixed assets with PHP17.1 billion (64.4%). This was followed by activities of holding companies with PHP6.0 billion (22.5%). Other financial service activities, except insurance and pension funding activities ranked third with PHP2.2 billion (8.1%).
NCR reported the highest gross additions to fixed assets comprising 88.5 percent or PHP23.5 billion. All regions acquired assets during the period.
Other financial service activities, except insurance and pension funding activities records the highest change in inventories
Total change in inventories (ending less beginning inventory) yielded a negative change in inventories in 2015. Other financial service activities, except insurance and pension funding activities led the sector at PHP453.8 million. Other industries that showed positive change in inventories were the following:
- Activities auxiliary to insurance and pension funding and fund management activities, PHP118.2 billion
- Trusts, funds and other financial vehicles, PHP2.0 million
- Activities auxiliary to financial services, except insurance and pension funding, PHP470 thousand and
- Pension funding, (PHP234 thousand)
All other industries reported negative change in inventories.
Regionwise, CALABARZON reported the highest change in inventories amounting to PHP90.2 million. Other regions with positive change in inventories were Northern Mindanao, combined regions of Caraga and ARMM, Zamboanga Peninsula, Eastern Visayas, Ilocos Region, Western Visayas, MIMAROPA, Negros Island Region and Bicol Region. All other regions exhibited negative change in inventories.
Total subsidies received from the government amounts to PHP24.1 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 PHP24.1 billion in 2015.
Only four industry groups received subsidies from the government. These were the following;
- Other financial service activities, except insurance and pension funding activities ,PHP 22.8 billion.
- Insurance, PHP1.3 billion.
- Activities of holding companies, PHP42.9 million.
- Monetary intermediation, PHP7.8 million.
At the regional level, only six of the regions reported subsidies received from the government. Davao Region received the highest subsidy of PHP22.0 billion. Ranked second was NCR with PHP2.2 billion. A far third was Cordillera Administrative Region with subsidy of PHP7.8 million. Cagayan Valley, Negros Island Region and Western Visayas were the other regions that received subsidy from the government.
Sales from e-commerce reaches PHP367 thousand
Sales from e-commerce of the sector reached PHP367 thousand in 2015.
Monetary intermediation was the only industry with e-commerce sales amounting to PHP367 thousand and the transactions were in Bicol Region.
This Special Release presents the preliminary results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI) for the Financial and Insurance Activities sector for establishments with total employment of 20 and over.
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 survey was conducted nationwide in 2016 with the year 2015 as the reference period of data, except for employment which is as of 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 and industry group or 3-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 and Maintenance 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, which engages, under a single ownership or control, in one or predominantly one kind of activity at a single fixed physical 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.
Selection of sample establishment for the 2014 ASPBI was done using stratified systematic sampling with 3-digit or 5-digit PSIC serving as industry strata and employment size as the second stratification variable.
For establishments with TE of 20 and over, the 18 administrative regions serve as the geographic domains while the 5-digit level of the 2009 PSIC serves as the industry domains.
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 and over
p = 1,2,...18 regions (geographic domains)
Xspj = 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,..., nsp establishments
Wspj = weight of the jth establishment in non-certainty employment strata in TE of 20 and over 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 with TE of 20 and over was 98.7 percent (1,011 out of 1,024 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, seventy one 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 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.
Intermediate expense are expenditures incurred in the production of goods such as materials and supplies used, fuels, lubricants, oils and greases used; electricity and water purchased, and industrial services done by others.
Value Added is gross output less intermediate input. Computation of gross output for financial and insurance activities sector varies per industry as presented below:
Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.
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.
Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry.