Legal activities industry dominates the sector
The final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) showed that a total of 7,048 establishments in the formal sector of the economy were engaged in professional, scientific and technical activities.
Among industries, legal activities had the highest number of establishments with 1,322 or 18.8 percent of the total for the sector. Film developing and printing and photograph enlarging followed with 827 establishments or 11.7 percent. Management consultancy activities ranked third with 777 establishments or 11.0 percent.
Figure 1 shows the percentage distribution of all establishments for the sector by industry sub-class in 2016.
Architectural and other engineering activities industry employs the highest number of workers
Employment in 2016 reached a total of 156,559 workers. Paid employees made up 98.7 percent of the total employment while the rest were working owners or unpaid workers.
By industry sub-class, architectural and other engineering activities employed the highest number of workers at 28,296 or equivalent to 18.1 percent of the sector’s total employment. Management consultancy activities followed with 27,396 workers (17.5%) and accounting, bookkeeping and auditing activities; tax consultancy with 15,509 workers (9.9%).
Figure 2 shows the distribution of employment of the top five industries of the sector for all establishments by industry sub-class in 2016.
The average number of workers per establishment for the sector was recorded at 22. Research and experimental development in information technology posted the highest average number of workers per establishment of 176.
Research and experimental development in health sciences industry pays the highest average annual compensation
The sector paid a total compensation of PHP77.5 billion, equivalent to an average annual compensation of PHP501.7 thousand per employee in 2016.
Among the industries, research and experimental development in health sciences paid the highest average annual compensation of PHP1.1 million per employee.
Other industries paying an average annual compensation of more than half a million pesos were the following:
- Management consultancy activities, PHP888.1 thousand per employee
- Activities of head offices, PHP721.9 thousand per employee
- Architectural and other engineering activities, PHP 585.2 thousand per employee
- Research and experimental development in information technology, PHP 569.0 thousand per employee
- Advertising agency, except billboard and outdoor advertising, PHP 545.2 thousand per employee
- Accounting, bookkeeping and auditing activities; tax consultancy, PHP518.2 thousand per employee
Figure 3 displays the average annual compensation of the top five industries of the sector for all establishments by industry sub-class in 2016.
Management consultancy activities industry contributes the biggest share in income and expense
In 2016, gross income generated by the sector reached PHP309.2 billion. Management consultancy activities had the biggest share of PHP82.4 billion or 26.7 percent of the total income for the sector.
On the other hand, total expense incurred by the sector amounted to PHP249.3 billion in 2016. Management consultancy activities had the biggest proportion in expense, amounting to PHP65.3 billion or 26.2 percent.
Figure 4 shows the income and expense of the top five industries of the sector for all establishments by industry sub-class in 2016.
Income per peso expense stands at 1.24
In 2016, the income generated per peso expense by the sector for all establishments stood at 1.24.
Among industries, eight posted an income per expense ratio of above the national level and these were as follows:
- Film developing and printing photograph enlarging, 1.67
- Veterinary activities, 1.44
- Legal activities, 1.38
- Photographic activities, n.e.c.,1.37
- Activities of head offices, 1.32
- Commercial and consumer photograph production (except aerial photography), 1.31
- Management consultancy activities, 1.26
- Advertising agency, except billboard and outdoor advertising, 1.25
Value added amounts to PHP180.8 billion
Value added for the Professional, Scientific and Technical Activities sector for all establishments was estimated at PHP180.8 billion in 2016.
The top three contributors to the total value added of the sector were the following:
- Management consultancy activities with PHP48.0 billion (26.5%)
- Activities of head offices with PHP45.4 billion (25.1%)
- Architectural and other engineering activities with PHP26.8 billion (14.8%)
Value added per total employment, a measure of labor productivity, was estimated at PHP1,155.0 thousand. Activities of head offices led the sector with labor of productivity of PHP6,074.9 thousand while research and experimental development in agricultural sciences registered the lowest labor productivity of PHP78.5 thousand.
Figure 5 shows the distribution of labor productivity of the five leading industries of the sector for all establishments by industry sub-class in 2016.
Gross additions to fixed assets reaches PHP5.0 billion
Gross additions to tangible fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PHP5.0 billion in 2016.
Among industries, two contributed more than one million pesos worth in gross additions to fixed assets in 2016. Management consultancy activities and activities of head offices recorded the highest gross additions to fixed assets, each contributing 22.8 percent to the total gross addition to fixed assets.
Total change in inventories amounts to PHP121.0 million
Total change in inventories (ending less beginning inventory) for all establishments was estimated at PHP121.0 million in 2016.
Three industries generated more than PHP20.0 million worth of change in inventories, and these were the following:
- Activities of head offices, PHP56.6 million;
- Architectural and other engineering activities, PHP33.3 million; and
- Technical testing and analysis, PHP24.2 million.
Activities of head offices industry receives PHP61.1 million subsidy
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.
Among industries, activities of head offices was the only industry which received subsidies in 2016, amounting to PHP61.1 million.
This Special Release presents the final results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for all Professional, Scientific and Technical Activities establishments (sector M).
The 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 2016.
The survey was conducted nationwide in 2017 with the year 2016 as the reference period, except for employment data which is 15 November 2016.
Establishment Data Management System (EDMS) was utilized in the decentralized processing of survey questionnaires in the provinces as well as the online accomplishment of questionnaire through the PSA website.
Data are presented by industry-class or 5-digit 2009 Philippine Standard Industrial Classification (PSIC) at the national level.
The conduct of the 2016 ASPBI is authorized under Republic Act 10625 known as the Philippine Statistical Act of 2013, which mandates reorganizing and strengthening of the Philippine Statistical System (PSS), its agencies and instrumentalities.
Scope and Coverage
The 2016 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 2016 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 2016 ASPBI was extracted from the 2016 List of Establishments (LE). The estimated number of establishments in operation in the country in 2016 totaled to 902,213. About 294,494 establishments (32.6%) of the total establishments belong to the formal sector of which 255,403 (86.7%) comprised the frame of the survey. This frame was used to draw the sample establishments for the survey.
Unit of Enumeration
The unit of enumeration for the 2016 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.
Taxonomy 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 PSA Resolution No. 1 Series 2017-158 signed on 14 February 2017 was utilized to classify economic units according to their economic activities.
Size of an establishment is determined by its TE as of specific date. 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 31 December 2016 was used for the 2016 ASPBI.
The 2016 ASPBI uses a stratified systematic sampling with 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 Stratum
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 in TE of less than 20 in sth industry domain
Ns = total number of establishments in the non-certainty employment stratum in TE of less than 20 in 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
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 characteristic for the industry domain is obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain. That is,
where d denotes the industry domain.
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)
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 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 the 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 for an industry domain in each region
b. Certainty Stratum (Establishments under the following: Section B and D, ICT core industries except J61902, Business Process Management (BPM) industries, Government Owned and Controlled Corporations (GOCCs) 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 jth establishment in the certainty employment strata in TE of 20 and over for an industry domain within 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) is obtained by aggregating the estimates for all employment strata (non-certainty and certainty) in the same industry domain,
where d denotes the industry domains and p refers to region
National level estimate of the characteristic by industry domain are 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, 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 sample establishments under Professional, Scientific and Technical Activities sector was 81.9 percent (605 out of 739 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.
Of the total responses, 25 establishments responded online.
Reports of the remaining non-reporting establishments were taken from other available 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 2016.
Limitation of Data
The survey covered only the formal sector of the economy.
Concepts and Definitions of Terms
Establishment is an economic unit under a single ownership and 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 15 November 2016.
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 is 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 is 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 is 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.
Inventories are 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.
See more at the Annual Survey of Philippine Business and Industry (ASPBI) page.