2018 Census of Philippine Business and Industry - Financial and Insurance Activities

Reference Number: 

2020-154

Release Date: 

Friday, August 14, 2020

The financial and insurance activities industry (Section K) includes nine industry groups covering financial service activities, including insurance, reinsurance, and pension funding and activities to support financial services. This section also includes the activities of holding assets, such as activities of holding companies and the activities of trusts, funds, and similar financial entities.

The highlights of results of the 2018 CPBI for the financial and insurance activities industry section is presented in Figure 1. This figure shows the number of establishments engaged in the industry sections, total employment created, total revenue generated, total expenses incurred, and total value added generated.

Other financial service activities, except insurance and pension funding activities led in terms of number of establishments

A total of 41,657 establishments were reported as engaged in financial and insurance activities in the formal sector of the economy in 2018.

Among the industry groups, other financial service activities, except insurance and pension funding activities, reported the highest number of establishments with 25,893 or 62.2 percent of the total. Monetary intermediation ranked next with 9,250 establishments or 22.2 percent of the total number of establishments. This was followed by activities auxiliary to financial service, except insurance and pension funding, with 3,295 establishments or 7.9 percent of the total number of establishments. (Table 1A, and Figure 2)

Figure 1

Figure 2

Across region, majority of the financial and insurance activities establishments were located in the National Capital Region (NCR) with 5,982 establishments or 14.4 percent of the total number of establishments. Central Luzon and Western Visayas placed second and third with 3,604 establishments (8.7%) and 3,056 establishments (7.3%), respectively. (Table 3A)

Eight of 10 workers in the industry section were involved with monetary intermediation activities or other financial service activities, except insurance and pension funding activities

In terms of total employment, the financial and insurance activities establishments employed 446,062 workers in 2018. This represents an increase of 44.5 percent compared to 2012 with 308,630 workers. On the average, the industry section employs 11 workers per establishment. (Table A, and Figure 1)

Among the industry groups, other financial service activities, except insurance and pension funding activities, and monetary intermediation activities generated a total of 186,827 (41.9%), and 181,391 (40.7%) workers, respectively. (Table 1A, and Figure 3)

Figure 3

 

 

Across region, NCR contributed the highest share to total employment, comprising almost half (187,115 workers or 41.9%) of the total workforce. Central Visayas and Central Luzon followed with 27,472 (6.2%) and 24,773 (5.6%) workers, respectively. (Table 3A)

Among the 17 regions, only NCR, with 31 employees per establishment on average, exceeded the national average of 11. (Table 4)

Employees in activities of holding companies were the highest paid

In 2018, the total compensation paid by financial and insurance activities amounted to PhP 293.4 billion, which was relatively higher by 97.6% compared to 2012 with PhP 148.5 billion. On the average, the industry section paid PhP 638.8 thousand per employee per annum. (Table A, and Figure 4)

Among industry groups, establishments involved in monetary intermediation activities paid the highest total compensation to its employees with PhP 155.3 billion or 52.9 percent of the total. Moreover, those involved in other financial services activities, except insurance and pension funding activities, followed with PhP 68.1 billion (23.2%) while those into insurance activities ranked third with PhP 29.1 billion (9.9%).

Of the nine industry sub-groups, six of them exceeded the national average annual compensation of PhP 638.8 thousand. These are activities of holding companies (PhP 2.0 million), trusts, funds and other financial vehicles (PhP 1.3 million), insurance (PhP 926.6 thousand), monetary intermediation (PhP 779.2 thousand), activities auxiliary to insurance and pension funding (PhP 704.0 thousand), and pension funding (PhP 669.4 thousand). (Figure 4)

Among regions, firms engaged in financial and insurances activities located in NCR spent the biggest share in total compensation amounting to PhP 176.5 billion or 60.2 percent of the total. Meanwhile, all other regions spent less than 5 percent share to total compensation. Only NCR and Davao Region, exceeded the national average compensation with PhP 944.7 thousand, and PhP 790.7 thousand, respectively. (Table 1)

Figure 4

 

Monetary intermediation led the industry in terms of revenue generation and expense incurred

The industry section generated a total revenue amounting to PhP 2.3 trillion in 2018. This represents an increase of 103.0 percent from PhP 1.1 trillion in 2012. (Table A)

Monetary intermediation industry group contributed the biggest share with PhP 904.5 billion or 39.5 percent of the total revenue. Ranked second is insurance industry group with PhP 533.9 billion (23.3%) followed by other financial service activities, except insurance and pension funding activities, with PhP 385.2 billion (16.8%). (Table 1A, and Figure 5)

Total expenses incurred in 2018 amounted to PhP 1.7 trillion. The said total expenses increased by 113.5 percent from PhP 775.4 billion in 2012. The top three industry groups that contributed the three largest shares in total expenses generated most of the revenue. These are monetary intermediation activities with PhP 695.1 billion (42.0%), insurance activities with PhP 444.3 billion (26.8%), and other financial service activities, except insurance and pension funding activities with PhP 221.8 billion (13.4%), respectively. (Table 1A, and Figure 5)

Meanwhile, pension funding activities; fund management activities; trusts, funds and other financial vehicles; and activities auxiliary to financial service, except insurance, generated less than 2 percent of the total revenue and total expense. (Table 1A, and Figure 5)

Figure 5

 

Across regions, NCR had the highest contribution to total revenue generated amounted to PhP 1.6 trillion (67.9%) and incurred total expense amounted to PhP 1.1 trillion (66.6%). Meanwhile, each of the other regions shared less than 5 percent of the total revenue and total expense. (Table 3A)

Revenue per expense ratio stood at 1.38

The revenue per peso expense generated by all firms of the industry section stood at 1.38, a decrease of 23.3 percent compared to 1.80 revenue per peso expense in 2012. (Table 2)

Pension funding (4.47), activities of holding companies (2.48), trusts, funds and other financial vehicles (2.11), other financial service activities, except insurance and pension funding activities (1.74), fund management activities (1.64), and activities auxiliary to financial service, except insurance and pension funding (1.58), exceeded the revenue per peso expense of the whole industry section. (Table 2)

Monetary intermediation contributed the highest value added

In 2018, the estimated total value added generated by all establishments of the industry section amounted to PhP 1.0 trillion. This translated to an increase of 71.7 percent relative to PhP 0.6 trillion in 2012. (Table A)

Among industry groups, monetary intermediation activities contributed the highest value added estimated at PhP 444.1 billion. Ranked second was other financial service activities, except insurance and pension funding activities, which generated an estimated value added of PhP 251.8 billion or 24.7 percent of the total and ranked third was activities of holding companies with PhP 160.2 billion or 15.7 percent.

Pension funding generated the least value added with PhP 804.8 million or 0.1 percent of the total. (Table 1A, and Figure 6).

Figure 6

NCR dominated in terms of value-added generation

The NCR had the highest contribution in total value-added with PhP 699.7 billion or 68.7 percent of the total. Meanwhile, each of the other regions accounted for less than 5 percent of the total value added. (Table 3A)

 

DENNIS S. MAPA, Ph.D.
Undersecretary
National Statistician and Civil Registrar General

 

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