Restaurants, bars, canteens and other eating and drinking places dominate hotel and restaurant sector

1. Based on the preliminary results of the 2009 Annual Survey of Philippine Business and Industry (ASPBI) conducted nationwide, with 2009 as the reference year, the Philippines had a total of 3,609 establishments with total employment (TE) of 20 and over engaged in hotels and restaurants. As shown in Figure 1, restaurants, bars, canteens and other drinking and eating places garnered the highest number of establishments at 2,940 (81.5%). Hotels, camping sites and other provisions of short-stay accommodation recorded the remaining number of establishments with only 669 or 18.5 percent.

Most establishments are located in National Capital Region

2. On the regional level, National Capital Region (NCR) had the most number of establishments with 1,807 (50.1%). CALABARZON (Region IV-A) placed second with 360 (10.0%) establishments while Central Luzon (Region III) followed with 8.5 percent of the total. Autonomous Region in Muslim Mindanao (ARMM) had the least with only 3 establishments (0.1 %).

Restaurants, bars, canteen and other eating and drinking places generate the highest employment

1. Employment in 2009 reached a total of 177,193. Figure 2 shows that, 174,815 or 98.7 percent were paid employees while the remaining 2,378 (1.3%) were working owners and unpaid workers.

   

2. Table 1 shows that restaurants, bars, canteens and other eating and drinking places having the highest number in terms of number of establishments, had the most number of employees with 129,686 (73.2%). The remaining number of employees were engaged in hotels, camping sites and other provisions of short-stay accommodation with only 47,507 or 26.8 percent.

3. Region wise, NCR was the top employer among regions with 87,795 employees (49.5%). CALABARZON followed with 16,785 employees (9.5%), while ARMM registered the least with only 157 employees or 0.1 percent.

   Restaurants, bars, canteens and other eating and drinking places pay the highest compensation

4. The total compensation paid by hotels and restaurants amounted to PhP22.2 billion, an equivalent of PhP127,004 average annual compensation per paid employee.

5. By industry group, restaurants, bars, canteens and other eating and drinking places paid the highest compensation to its employees amounting to PhP13.6 billion or 61.5 percent of the total. Hotels, camping sites and other provisions of short-stay accommodation paid PhP8.6 billion or 38.5 percent.

   
    

6. Table 2 shows that labor payments in NCR amounted to PhP13.4 billion or 60.5 percent of the total compensation paid nationwide. CALABARZON spent PhP1.7 billion (7.8%) in compensation, not far behind was Central Visayas (Region VII) with PhP1.7 billion or 7.7 percent. ARMM was the least payer with only PhP9.8 million (0.04%).

   Hotels, camping sites and other provisions of short-stay accommodation employees earn the highest in 2009

7. Hotels, camping sites and other provisions of short-stay accommodation employees were the highest earners in 2009 with an average annual compensation of PhP185.4 thousand per paid employee. Employees of restaurants, bars, canteens and other eating and drinking places received an average annual remuneration of PhP106.1 thousand.

8. By region, NCR based workers received the highest average annual compensation of PhP154.2 thousand per paid employee while employees from Region VIII received the least with only PhP62.2 thousand. Table 4 shows the average annual compensation per paid employee by region. 

   Total revenue amounts to PhP143.4 billion; restaurants, bars, canteens and other eating and drinking places produce the largest revenue

9. Gross revenue earned in 2009 for hotels and restaurants sector reached PhP143.4 billion. Restaurants, bars, canteens and other eating and drinking places were the top contributor with PhP102.3 billion or 71.3 percent of the total. Hotels, camping sites and other provisions of short-stay accommodation generated only PhP41.1 billion (28.7%).

10. With respect to regions, NCR produced the highest revenue amounting to PhP86.0 billion (60.0%). The least revenue was made by ARMM with only 0.01 percent.

    Total cost reaches PhP108.3 billion; restaurants, bars, canteens and other eating and drinking places spend the highest

11. Cost for operating the industry summed up to PhP108.3 billion. Restaurants, bars, canteen and other eating and drinking places incurred the highest cost with PhP78.4 billion (72.4%). Hotels, camping sites and other provisions of short-stay accommodation incurred a total cost of PhP29.9 billion or 27.6 percent.

12. By region, NCR spent the largest as it incurred PhP64.6 billion (59.6 %) for operating the industry. CALABARZON followed with PhP10.9 billion (10.0%) . The least cost was recorded by ARMM with only PhP19.5 million (0.02%).

    

    Revenue-cost ratio amounts to 1.32; hotels, camping sites and other provisions of short-stay accommodation record the highest returns

13. Revenue-cost ratio, the revenue generated per PhP1 cost, amounted to PhP1.3. Among industries, hotels, camping sites and other provisions of short-stay accommodation recorded the highest with PhP1.4 revenue per PhP1 cost. Restaurants, bars, canteens and other eating and drinking places had PhP1.3 revenue per PhP1 cost.

    Value added amounts to PhP46.7 billion

14. Value added was estimated at PhP46.7 billion. Total value added of restaurants, bars canteens and other eating and drinking places was recorded at PhP28.9 billion or 62.0 percent. Hotels, camping sites and other provisions of short-stay accommodation had a total value added of PhP17.7 or 38.0 percent.

    

    Hotels, camping sites and other provisions of short-stay accommodation employees are the most productive

15. Employees of hotels, camping sites and other provisions of short-stay accommodation were the most productive in 2009 in terms of revenue per employee with PhP865.4 thousand per employment, 6.9 percent higher than the national average of PhP809.5 thousand. Restaurants, bars, canteens and other eating and drinking places had PhP789.0 thousand.

16. Value added per total employment, another measure of labor productivity, was valued at an average of PhP263.3 thousand per employee. Among industries, hotels, camping sites and other provisions of short-stay accommodation had the highest average at PhP372.8 thousand while restaurants, bars, canteens and other eating and drinking places was estimated at PhP223.2 thousand.

    Total change in inventories values at PhP560.5 million

17. Change in inventories, defined as the value of ending inventory less the beginning, amounted to PhP560.5 million in 2009. Restaurants, bars, canteens and other eating and drinking places recorded the highest with PhP489.3 million, while hotels, camping sites and other provisions of short-stay accommodation had PhP71.2 million.

    Gross additions to tangible fixed assets totals PhP14.3 billion

18. Gross additions to tangible fixed assets in 2009 totaled to PhP14.3 billion. Hotels, camping sites and other provisions of short-stay accommodation recorded the highest amounting to PhP11.3 billion (78.8%). Restaurants, bars, canteens and other eating and drinking places had PhP3.0 billion (21.2%).

TECHNICAL NOTES

Introduction

The 2009 Annual Survey of Philippine Business and Industry (ASPBI), conducted in 2010 with 2009 as reference year, is one of the continuing activities of the National Statistics Office. It will be a source of benchmark levels on the structure and trends of economic activities in the country for the year 2009. Particularly, the data from ASPBI will be used in constructing national and regional income accounts in the country, determining and comparing regional economic structures, and formulating plans and policies of the government in the attainment of economic goals..

The conduct of the ASPBI is governed by legislative acts and presidential directives, specifically Commonwealth Act No. 591 which was approved on August 19, 1940..

Scope and coverage

The 2009 ASPBI covered establishments engaged in 14 economic sectors classified under the Amended 1994 Philippine Standard Industrial classification (PSIC) namely:.

• Agriculture, Hunting and Forestry

• Fishing

• Mining and Quarrying

• Manufacturing

• Electricity, Gas and Water Supply

• Construction

• Wholesale and Retail Trade; Repair of Motor Vehicles, Motorcycles and Personal and Household Goods

• Hotels and Restaurants

• Transport, Storage and Communications

• Financial Intermediation

• Real Estate, Renting and Business Activities

• Private Education

• Health and Social Work

• Other Community, Social and Personal Service Activities

The scope of the ASPBI was confined to "formal sector" only, which consists of the following:.

• Corporations and partnership

• Cooperatives and foundations

• Single proprietorships with employment of 10 or more

• Single proprietorships with branches

Like all other establishment surveys conducted by the NSO, the 2009 ASPBI used establishment as the unit of enumeration. It is defined as "an economic unit under a single ownership or control, i.e. under a single legal entity, engaged in one or predominantly one kind of economic activity at a single fixed location."

Classification of Establishments

Before the actual selection of samples, the establishments listed in the frame were classified based on economic organization EO), legal organization (LO), industrial classification, employment size, and geographic location.

Economic organizations relates to the organizational structure or role of the establishment in the organization. The following are the types of economic organization:

• Single establishment is an establishment which has neither branch nor main office

• Branch only is an establishment which has a separate main office located elsewhere

• Establishment and main office, both located in the same address and with branches elsewhere

• Main office only is the unit which controls, supervises and directs one or more establishments of an enterprise

• Ancillary unit other than main office is the unit that operates primarily or exclusively for a related establishment or group of related establishments or its parent establishment and provides goods or services that support but do not become part of the output of those establishments

The legal organization provides the legal basis for ownership of the establishment. The following are the types of legal organization:

• Single Proprietorship refers to a business establishment organized, owned, and managed by one person, who alone assumes the risk of the business enterprise. The establishment name is that of a person, or it has words such as Owner, Proprietor or Operator

• Partnership refers to an association of two or more individuals for the conduct of a business enterprise based upon an agreement or contract between or among them to contribute money, property or industry into a common fund with the intention of dividing profits among themselves. The establishment name includes words such as Owners , Partners, Limited or LTD., Associates or ASSOCS

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• Government Corporation is a private corporation organized for private aim, benefit or purpose and owned and controlled by the government. The establishment name included words such as Corporation or CORP., INCORPORATED or INC

• Private Corporation is a corporation organized by private persons. The establishment name includes words such Corporation or Corp, Incorporated or INC

• Cooperative - the establishment name includes words such as Cooperative or COOP

The industrial classification of an economic unit is determined by the activity from which it derives its major income or revenue. The amended 1994 PSIC is utilized to classify units according to their economic activities.

The amended 1994 PSIC consists of an alpha character and 5 numeric digits. The alpha character, which represents the major division, is denoted by the characters A to Q. The first two numeric digits represent the division; the first three numeric digits, the group; the first four digits, the class; and the 5 digits, the sub-class.

The size of the establishment is determined by its total employment (TE). The following are the employment size classification used in the 2009 ASPBI:

The geographic or physical location of the establishments was classified in accordance with the Philippine Standard Geographic Code (PSGC) as of December 30, 2006 which contains the latest updates on the number of regions, provinces, cities, municipalities and barangays in the Philippines.

The geographic domains of the 2009 ASPBI for establishments with TE of 20 and over are the 17 administrative regions while the whole country serves as the geographic domain for establishments with TE of less than 20.

Hence, the samples of the 2009 ASPBI with TE of 20 and over shall provide data for 17 administrative regions. For samples with TE less than 20, the data that will be presented is limited only at the national level.

Response Rate

A total of 2,893 or 94.4 percent of sample establishments responded. These include receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Concepts and Definition of Terms

Economic activity or business is the activity of the establishment as classified under the amended 1994 Philippine Standard Industrial Classification (PSIC). Generally, the main activity of the establishment is the establishment's principal source of income. If the establishment is engaged in several activities, its main activity is that which earns the biggest income or revenue.

Total Employment is the number of persons who worked in or for this establishment as of November 15, 2009.

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, workers receiving pure commissions only, and workers on indefinite leave.

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.

Revenue is the value of goods, products/by-products sold and/or services rendered to others whether paid in cash or is considered receivable by the establishment. Valuation of products/by products sold should be in producer's price (ex-establishment), net of discounts and allowances, including duties and charges but excluding subsidies. It also include goods transferred and/or services rendered to other establishment belonging to the same enterprise as the said establishment which should be treated as sales or as if sold to a customer; and revenue from products on a contractual basis from materials supplied by the establishment.

Cost refers to all expenses excluding compensation incurred during the year whether paid or payable. Valuation should be at purchaser's price including taxes and other charges, net of discounts, rebates, returns and allowances. Goods received from and services rendered by other establishment of the same enterprise are valued as though purchased.

Fixed assets are physical assets expected to have productive lives of more than one year and intended for use and/or being used by the establishment. Included are land, buildings, other structures and land improvements, transport equipment, machinery and equipment, furniture, fixtures, and other fixed assets.

Book Value of Tangible Assets is the initial value or acquisition cost of tangible fixed assets less the accumulated depreciation.

Gross additions to fixed assets is the sum of cost of new and used fixed assets acquired during the year, cost of alteration and improvements done by others and cost of fixed assets produced by the establishment less the value of sales of fixed assets during the year.

Value Added is gross output less intermediate input. Gross output for hotels and restaurants is the sum of the total revenue (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 cost items: materials and supplies purchased; fuels, lubricants, oils and greases purchased; electricity and water purchased; cost of industrial services done by others; cost of non-industrial services done by others; goods purchased for resale; research and experimental development expense; environmental protection expense; royalty fee; franchise fee and other cost.

Inventories refer to the stocks of goods owned by and under the control of the establishment as of a fixed date, regardless of where the stocks are located. Valuation should be at current replacement cost in purchaser's price at the indicated dates. Replacement cost is the cost of an item in terms of its present price rather than its original price.

Change in Inventories is equivalent to the total value of inventories at the end of the year less the value at the beginning of the year.

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 or production and to protect it against competition.

Source;   National Statistics Office
                 Manila, Philippines