Legal activities industry outnumbers all other industries
The final results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI) revealed that a total of 7,097 establishments in the formal sector of the economy were engaged in Professional, Scientific and Technical Activities.
For the 2015 round, legal activities industry had the highest number of establishments with 1,294 or 18.2 percent of the total. Management consultancy followed with 928 establishments at about 13.1 percent. Film developing and printing and photograph enlarging industry ranked third with 859 establishments or 12.1 percent. Figure 1 shows the percentage distribution of all establishments by industry sub-class in 2015.
Architectural and other engineering activities employs the highest number of workers
Employment of the sector in 2015 reached a total of 154,232 workers. Almost all workers (98.8%) were paid employees and the rest were working owners or unpaid workers.
Among industries, architectural and other engineering activities had the most number of workers with 29,694 employees equivalent to 19.3 percent of the total. Management consultancy activities followed generating 26,862 workers (17.4%). Accounting, bookkeeping and auditing activities; tax consultancy ranked third with 13,755 employees or 8.9 percent. Figure 2 shows the distribution of employment of the sector for all establishments by industry sub-class in 2015.
Total compensation sums up to PHP60.2 billion in 2015
The sector paid a total compensation of PHP60.2 billion, equivalent to an average annual compensation of PHP395.1 thousand per paid employee in 2015.
Management consultancy activities paid the highest total compensation of PHP15.9 billion comprising 26.5 percent of the total. This was followed by architectural and other engineering activities with PHP11.5 billion (19.1%) and third, activities of head offices with PHP6.3 billion (10.5%).
Across industries, activities of head offices paid the highest average annual compensation of PHP728.6 thousand per paid employee. Environmental engineering activities followed closely with an average annual compensation of PHP676.1 thousand per paid employee. Management consultancy activities ranked third posting an average annual compensation of PHP592.6 thousand per paid employee. Figure 3 displays the average annual compensation of the sector for all establishments by industry sub-class.
Activities of head offices are the biggest earner and spender in 2015
Gross income generated by the sector reached PHP289.3 billion in 2015. Combined income of the top three industries comprised more than two-thirds of the total (66.6%). Activities of head offices had the biggest share with PHP76.1 billion or 26.3 percent. Management consultancy activities ranked second with PHP74.3 billion (25.7%) and architectural and other engineering activities came in third with PHP33.5 billion (11.6%).
Total expenses incurred amounted to PHP220.9 billion in 2015. Being the major contributor in income, activities of head offices had the largest proportion in expense with PHP58.2 billion (26.3%). This was followed by management consultancy activities and architectural and other engineering activities with PHP48.4 billion (21.9%) and PHP24.6 billion (11.1%) respectively. Figure 4 shows the top industries in terms of income and expense.
Income per expense ratio returns at 1.31
In 2015, the income per peso expense produced by the sector stood at 1.31. Among industries, research and experimental development in engineering and technology recorded the highest income per peso expense and surpassed the national ratio at 1.64. Management consultancy activities followed next with 1.54 and legal activities ranked third with 1.40 income per peso expense.
Activities of head offices are the highest contributor to the total Value added
Value added of the sector was estimated at PHP163.8 billion in 2015.
The top three contributors to the total value added were the following:
- Activities of head offices with PHP46.1 billion (28.1%);
- Management consultancy activities with PHP45.8 billion (27.9%); and
- Architectural and other engineering activities with PHP24.2 billion (14.8%).
Value added per total employment, a measure of labor productivity, was estimated at PHP1,062.1 thousand. Activities of head offices led the sector with PHP5,259.9 thousand while digital photograph processing was the lowest with PHP177.2 thousand. Figure 5 shows the top five labor productive industries for the sector.
Gross additions to fixed assets sum up to PHP4.7 billion in 2015
Gross additions to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP4.7 billion in 2015.
Activities of head offices acquired the biggest gross addition to fixed assets at PHP1.5 billion (32.56%), followed by management consultancy and architectural and other engineering activities with PHP681.7 million (14.5%) and PHP618.7 million (13.2%), respectively.
Total change in inventories reaches PHP2.4 million in 2015
Total change in inventories defined as the value of ending less beginning inventory amounted to PHP2.4 million in 2015.
Other professional, scientific and technical activities, n.e.c. recorded the highest change in inventories of PHP136.9 million. Other industries which registered more than fifty million change in inventories were the following:
- Technical testing analysis, PHP119.5 million
- Commercial and consumer photograph production (except aerial photography), PHP81.2 million
- Activities of head offices of PHP59.0 million
Government provides PHP143.6 million worth of subsidies
Subsidies granted by the government to support business operation for all establishments of the sector amounted to PHP143.6 million. Among industries, management consultancy activities was the only recipient of the subsidy.
This Special Release presents the final results of the 2015 Annual Survey of Philippine Business and Industry (ASPBI) for all Professional, Scientific and Technical Activities (Sector M) 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 on Information and Communication Technology (SICT) was undertaken as a rider to this survey.
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 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.
Selection of sample establishment for the 2015 ASPBI was done using stratified systematic sampling with 5-digit PSIC serving as industry strata and employment size as the second stratification variable.
For Establishments with TE of Less Than 20
a. Non-Certainty Stratum
The estimate of the total of a characteristic for the non-certainty employment stratum TE less than 20 in the sth industry domain was
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)
Response rate for all Professional, Scientific and Technical Activities sector was 92.2 percent (710 out of 770 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, 15 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. Gross output for Professional, Scientific and Technical Activities sector is the sum of the total income (less interest income, rent income from land, dividend income, royalty income and franchise income), capital expenditures of fixed assets produced on own account and change in inventories. 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); goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee; 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.