Business activities, not elsewhere classified (n.e.c.) leads the sector

Preliminary results of the 2009 Annual Survey of Philippine Business and Industry showed that a total of 2,596 establishments with total employment of 20 and over were engaged in Real Estate, Renting and Business Activities.

More than half (55%) of the total were engaged in Business activities, n.e.c; majority of which were involved in Investigation and security activities. Real estate activities with own or leased property ranked far second with 10 percent and Legal; accounting, bookkeeping and auditing activities; Tax consultancy; Market research and public opinion polling; and Business and management consultancy activities, third with 9.7 percent. On the other hand, Research and experimental development in social sciences recorded the lowest number. Figure 1 shows the distribution of Real Estate, Renting and Business Activities establishments with total employment of 20 and over by industry group (See Legend).

Majority of establishments are in the National Capital Region (NCR)

At the regional level, the NCR had the most number of establishments with 76.3 percent. Central Visayas and CALABARZON placed second and third with 5.4 percent and 5.2 percent, respectively. MIMAROPA had the least number with only 3.

Business activities, n.e.c. employs the highest number of workers (NCR)

The sector employed a total of 616,518 workers in 2009. Of the total, almost all (99.5%) were paid employees and the rest were working owners or unpaid workers.

Having the most number of establishments, Business activities, n.e.c. likewise employed the biggest number of workers (78.6%), with Investigation and security activities and Call center activities having the biggest share of 35.7 percent and 20.5 percent, respectively. Legal; Accounting, bookkeeping and auditing activities; Tax consultancy; Market research and public opinion polling; and Business and management consultancy activities and Software consultancy and supply followed next with 4.9 percent and 4 percent, respectively. On the other hand, Renting of transport equipment recorded the least with less than one percent.

Region wise, the NCR recorded the biggest share in employment comprising almost three-fourths (73.6%) of the total workforce. Central Vizayas placed far second with 6.6 percent and CALABARZON third, with 5.8 percent. MIMAROPA registered the least.

Workers in software consultancy and supply are the highest-paid employees

In 2009, the sector paid a total compensation of PhP147.1 billion, equivalent to an average annual compensation of PhP239,726 per paid employee. About 93.1 percent (PhP137 billion) of the total was spent for gross salaries and wages and the remaining 6.9 percent (PhP10.2 billion), for employer’s contribution to SSS/GSIS and the like (5.3%) and separation, retirement, terminal pay, gratuities and others (1.6%).

Industry wise, Business activities, n.e.c. paid the highest compensation of PhP92.7 billion comprising more than three-fifths (63%) of the total. Legal; Accounting, bookkeeping and auditing activities; Tax consultancy; Market research and public opinion polling; Business and management consultancy placed second with PhP14.5 billion or 9.9 percent. Software consultancy and supply ranked third with PhP13.7 billion or 9.3 percent. On the other hand, Renting of transport equipment recorded the lowest amount of Ph17.5 million (0.01%).

Among regions, the NCR spent the biggest share in compensation amounting to PhP122.2 billion (83.1%). Central Visayas and CALABARZON were in second and third place with PhP8.9 billion (6%) and PhP6.1 billion (4.2%), respectively. On the contrary, the MIMAROPA Region paid the least with PhP15.8 million (0.01%).

Workers in Software consultancy and supply were the highest-paid employees receiving an average of PhP547,804 per annum. Employees of Research and experimental development in natural sciences and Legal; Accounting, bookkeeping and auditing activities; Tax consultancy; Market research and public opinion polling; Business and management consultancy followed next with PhP535,029 and PhP485,236; respectively. However, those employed in Renting of transport equipment received the lowest annual pay of PhP140,281. Figure 2 shows the average annual compensation per paid employee by industry group (See Legend).

Employees working in the National Capital Region received the highest average annual compensation of PhP269,543 while those employed in Caraga received the lowest with PhP47,076. Figure 3 shows the average annual compensation per paid employee by region.

Real estate activities with own or leased property and Business activities, n.e.c. contribute the biggest share in revenue and cost

Gross revenue realized by the sector reached PhP526.1 billion in 2009. Real estate activities with own or leased property had the biggest share with PhP198.8 billion or 37.8 percent of the total. Business activities, n.e.c. came next with PhP177 billion (33.6%). On the other hand, Renting of transport equipment shared the least with PhP442.8 million (0.1%).

Total costs (excluding compensation paid to employees) amounted to PhP270.7 billion in 2009. Being the major contributors in revenue, Real estate activities with own or leased property and Business activities, n.e.c. also had the largest proportion in cost with PhP137.7 billion (50.9%) and PhP61.5 billion (22.7%), respectively. However, Maintenance and repair of office accounting and computing machinery incurred the lowest cost of PhP243.2 million (0.1%). Figure 4 shows the top five industry groups in revenue and cost (See Legend).

Value added totals to PhP293.7 billion

Value added derived by Real Estate, Renting and Business Activities sector totaled to PhP293.7 billion in 2009.

Industry wise, Business activities, n.e.c. registered the highest value added with PhP126.5 billion (43.1%) while Research and experimental development in social sciences recorded the least with PhP111.9 million (0.04%).  (See Fig.5 and Legend).

Real estate activities with own or leased property has the highest labor productivity

Value added per employee, a measure of labor productivity, was estimated at PhP476,389. Again Real estate activities with own or leased property led the sector with PhP4.3 million while Research and experimental development in social sciences, the lowest with PhP187.7 thousand.

Total change in inventories amounts to PhP1.07 billion

Total change in inventories (ending less beginning inventory) amounted to PhP1.07 billion in 2009. Real estate activities with own or leased property had the highest change in inventory with PhP1.02 billion or 95.8 percent of the total. Other computer related activities and Renting of transport equipment far followed with PhP73.2 million and PhP40 million. However, Real estate activities on a fee or contract basis; Software consultancy and supply, Database activities and on-line distribution of electronic content; Research and experimental development in natural sciences; Legal; accounting, bookkeeping, auditing and tax consultancy activities; market research and public opinion polling; and business and management consultancy activities; and Business activities, n.e.c. derived negative value of change in inventories.

Gross addition to fixed assets reaches PhP22.5 billion

Gross addition to fixed assets (capital expenditures less sale of fixed assets) acquired by the sector reached PhP22.5 billion in 2009.

Real estate activities with own or leased property; Business activities, n.e.c.; and Legal; accounting, bookkeeping, auditing and tax consultancy activities; market research and public opinion polling; and business and management consultancy activities acquired the biggest gross addition to fixed assets with PhP10 billion, PhP7.4 billion and PhP2.4 billion; respectively. On the other hand, Research and experimental development in social sciences reported the least with PhP32.4 million (0.1%).

Total subsidies received from the government amounts to PhP539.7 million

Total subsidies received from the government amounted to PhP539.7 million in 2009.

Five industry groups received subsidies from the government. Real estate activities with own or leased property and Business activities, n.e.c. got the highest amount with PhP394.4 million (73.1%) and PhP129.2 million (23.9%), respectively while Legal; accounting, bookkeeping, auditing and tax consultancy activities; market research and public opinion polling; and business and management consultancy activities received the least with PhP400 thousand (0.1%).

LEGEND:

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:

• A - Agriculture, Hunting and Forestry
• B - Fishing
• C - Mining and Quarrying
• D - Manufacturing
• E - Electricity, Gas and Water Supply
• F - Construction
• G - Wholesale and Retail Trade, Repair and Maintenance of Motor Vehicles, Motorcycles, and Personal and Household Goods
• H - Hotels and Restaurants
• I - Transportation, Storage and Communications
• J - Financial Intermediation
• K - Real Estate, Renting and Business Activities
• M - Private Education
• N - Health and Social Work
• O - Other Community, Social and Personal Service Activities

The scope of the ASPBI was confined to the "formal sector" only consisting 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 organization refers 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 provide 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.
• 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 average total employment (ATE). 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 of less than 20, the data that will be presented is limited only at the national level.

Response Rate

A total of 2,966 or 91.7 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 DEFINITIONS 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.

Costs refers to all expenses excluding compensation incurred during the year whether paid or payable. Valuation should be at purchaser 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.

Costs of goods sold represents the sum of the total value of goods purchased for resale and change in inventory of goods for resale (beginning less ending).

Value added is gross output less intermediate costs.

Gross Output is equal to the sum of the total revenue (less rent income from land, delivery charges separately invoiced to customers, royalty income and franchise income), capital expenditures of fixed assets produced on own account and change in inventories of goods for resale ;less cost of goods purchased for resale.

Intermediate costs is equal to the sum of the following cost items: materials and supplies ; fuels, lubricants, oils and greases ; electricity and water ; cost of industrial services done by others; cost of non-industrial services done by others(less rent expense for land);research and experimental development expense; environmental protection expense; royalty fee; franchise fee, inventory of materials and supplies, fuels, lubricants, oils and greases (beginning less ending) and other cost.

Fixed assets are physical assets expected to have productive life 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, fixtures, machinery, tool, furniture, office equipment and other fixed assets.

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

Gross addition to fixed assets is the sum of costs 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.

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