Computer programming, consultancy and related activities industry posts the highest in terms of number of establishments

The 2016 Annual Survey of Philippine Business and Industry (ASPBI) preliminary results reported a total of 846 establishments with total employment (TE) of 20 and over in the formal sector of the economy engaged in Information and Communication activities.

Among industries, computer programming, consultancy and related activities had the highest number of establishments with 380 or 44.9 percent of the total for the sector. Satellite telecommunications activities followed with 84 establishments or 9.9 percent. Publishing of books, periodicals and other publishing activities ranked third with 81 establishments or 9.6 percent.

Figure 1 shows the percentage distribution of Information and Communication establishments with TE of 20 and over by industry group in 2016.

Among the regions in the Philippines, the National Capital Region (NCR) had the most number of establishments with 577 establishments or 68.2 percent of the total. Central Visayas and Central Luzon placed afar second and third with 66 establishments (7.8%) and 32 establishments (3.8%), respectively.

Computer programming, consultancy and related activities industry records the highest number of workers

In 2016, employment reached a total of 127,561 workers, in which 127,332 were paid and the rest were working owners or unpaid workers.

Computer programming, consultancy and related activities had the highest number of workers with 51,181 workers or 40.1 percent of the total employment for the sector. Wireless telecommunications activities followed with 16,235 workers (12.7%). Data processing, hosting and related activities; web portals ranked third with 15,186 workers (11.9%).

Figure 2 shows the distribution of employment of the sector for establishments with TE of 20 and over by industry group in 2016.

Across regions, NCR had the highest number of workers with 105,488 workers or 82.7 percent of the total employment. Central Visayas followed with 9,003 workers (7.1%) and Central Luzon placed third with 3,099 workers (2.4%).

Employees in the wired telecommunications industry are the highest-paid

The sector paid a total compensation of PHP83.5 billion, translating to an average annual compensation of PHP656.0 thousand per employee.

Industry-wise, computer programming, consultancy and related activities paid the highest compensation of PHP33.0 billion. This was followed by wired and wireless telecommunications activities with a total compensation of PHP15.5 billion and PHP11.2 billion, respectively.

Wired telecommunications activities had the highest average annual compensation among industries, with PHP1,580.7 thousand per employee. Software publishing followed with an average annual compensation of PHP1,188.4 thousand per employee. Television programming and broadcasting activities ranked third with an average annual compensation of PHP755.9 thousand per employee.

Figure 3 shows the average annual compensation of employees of the sector for establishments with TE of 20 and over by industry group in 2016.

Region-wise, establishments in NCR paid the highest total compensation of PHP76.7 billion. This was followed by Central Visayas and Central Luzon with a total compensation of PHP3.7 billion and PHP771.0 million, respectively.

Employees in NCR had the highest average annual compensation of PHP727.9 thousand per employee. Ilocos Region came in second, with an average annual compensation of PHP563.1 thousand per employee and Negros Island Region placed third with PHP419.2 thousand per employee.

Wireless telecommunications activities industry generates the biggest share in income and expense

The total income generated by the sector amounted to PHP577.1 billion in 2016. Wireless telecommunications activities had the biggest share in income with PHP257.5 billion or 44.6 percent of the total for the sector. Computer programming, consultancy and related activities placed second with income amounting to PHP102.5 billion (17.8%) and wired telecommunications activities ranked third with PHP97.4 billion (16.9%).

On the other hand, total expense incurred in 2016 reached PHP479.8 billion. Wireless telecommunications activities which was the biggest income generator, also had the biggest proportion of expense worth PHP216.6 billion or 45.1 percent of the total. Computer programming, consultancy and related activities and wired telecommunications activities ranked second and third with PHP93.2 billion (19.4%) and PHP66.5 billion (13.9%), respectively.

Figure 4 shows the distribution of income and expense of the top five industries of the sector for establishments with TE of 20 and over in 2016.

At the regional level, NCR had the highest income and expense which amounted to PHP549.8 billion and PHP456.9 billion, respectively. Central Visayas followed far second with total income of PHP8.5 billion and total expense of PHP7.4 billion. On third post was Central Luzon with total income of PHP5.9 billion and total expense of PHP4.4 billion.

Income per peso expense registers at 1.20

The income per peso expense generated by the sector for establishments with TE of 20 and over stood at 1.20.

Industry-wise, wired telecommunication activities recorded the highest income per peso expense of 1.46, followed closely by data processing, hosting and related activities; web portals with income per expense ratio of 1.44. Motion picture, video and television programme activities ranked third with income per expense ratio of 1.39.

By region, Central Luzon recorded the highest income per expense ratio of 1.34 while Zamboanga Peninsula, the lowest income per expense ratio of 0.99.

Value added of the sector reaches PHP223.0 billion

In 2016, the estimated value added for the sector amounted to PHP223.0 billion.

The top three contributors to the total value added were the following industries:

• Wireless telecommunications activities, PHP80.0 billion (35.9%)
• Computer programming, consultancy and related activities, PHP47.1 billion (21.1%)
• Wired telecommunications activities, PHP44.8 billion (20.1%)

Value added per employment, a measure of simple labor productivity, was estimated at PHP1,748.0 thousand per worker. Wireless telecommunications activities recorded the highest labor productivity of PHP4,926.0 thousand per worker while radio broadcasting and relay station and studios recorded the lowest labor productivity of PHP652.4 thousand per worker.

Figure 5 shows the labor productivity for the top five industries in Information and Communication establishments with TE of 20 and over in 2016.

Region-wise, Ilocos Region had the highest labor productivity of PHP3,327.3 thousand per worker, while MIMAROPA Region registered the least with PHP145.7 thousand per worker.

Gross additions to tangible fixed assets amounts to PHP52.5 billion

Gross additions to tangible fixed assets (capital expenditures less sale of tangible fixed assets) acquired by the sector reached PHP52.5 billion in 2016.

Wireless telecommunications activities had the biggest share with PHP32.2 billion or 61.4 percent of the total. Wired telecommunications activities placed second with PHP8.7 billion or 16.6 percent of the total.

Among regions, NCR acquired the biggest gross additions to fixed assets amounting to PHP50.0 billion or 95.2 percent of the total for the sector.

Publishing of books, periodicals and other publishing activities industry records a total change in inventory of PHP43.1 million

Total change in inventories is defined as the value of ending less beginning inventory.

Among the industries, only three recorded a positive value of change in inventories and these were the following:

• Publishing of books, periodicals and other publishing activities, PHP43.1 million
• Wired telecommunications activities, PHP8.4 million
• Other telecommunications activities, PHP4.5 million

Total subsidies reaches PHP37.7 million

In 2016, total subsidies received from the government by the sector amounted to PHP37.7 million. The industries that received subsidies from the government were wired telecommunications activities and computer programming, consultancy and related activities with PHP25.8 million and PHP11.9 million, respectively.

Sales from e-commerce transactions amounts to PHP538.5 million

E-commerce refers to the selling of products or services over electronic system. Total sales from e-commerce transactions amounted to PHP538.5 million in 2016. Among industries, computer programming, consultancy and related activities had the highest share amounting to PHP357.5 million or 66.4 percent of the total sales from e-commerce.

TECHNICAL NOTES

Introduction

This Special Release presents the preliminary results of the 2016 Annual Survey of Philippine Business and Industry (ASPBI) for Information and Communication sector for establishments with total employment of 20 and over.

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 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 questionnaires through the PSA website.

Data are presented by industry group or 3-digit 2009 Philippine Standard Industrial Classification (PSIC) at the national and regional levels.

Legal Authority

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 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 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 establishment frame. 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. 01 Series of 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.

Sampling Design

The 2016 ASPBI was done uses a stratified systematic sampling with 3-digit or 5-digit PSIC serving as industry strata and employment size as the second stratification variable.

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 TE of 20 and over for an industry domain in each region,

where:

      s = denotes the non-certainty employment strata in TE of 20 and over       

      p = 1, 2,..., 18 regions (geographic domains)        

   X_spj = value of the j^thestablishment in the non-certainty employment strata with TE of 20 and over for an industry domain in each region  

       j = 1,2,3,..., n_sp establishments                                                 

  W_spj = weight of the j^th establishment in the non-certainty employment strata with TE of 20 and over for an industry domain in each region                                                                                                                                                                                      

   N_sp = total number of establishments in the non-certainty employment strata in TE of 20 and over for an industry domain in each region

    n_sp = 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, D and J, ICT core industries, Business Process Management (BPM) industries, Government-owned and controlled corporations (GOCCs) and with TE 100 and over)

       The estimate of the total of a characteristic for the certainty employment stratum in an industry domain in each region,

where:

       c = denotes the certainty employment strata in TE of 20 and over        

       p = 1,2,...18 regions (geographic domains)

   X_cpj = value of the j^thestablishment in the non-certainty employment strata in TE of 20 and over for an industry domain in each region 

       j = 1,2,3,..., m_cp establishments                                                 

  m_cp = 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 estimates for all employment strata  (non-certainty and certainty) in the same industry domain,

 

where dp denotes the industry domain in each region

National level estimate of the the characteristics 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

where:

 N_sp = 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

Response rate for Information and Communication sector for establishments with TE of 20 and over was 94.0 percent (875 out of 931 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments.

Of the total responses, 24 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 2016.

Limitation of Data

The survey covers 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 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 Information and Communication 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; goods purchased for resale; research and development expense; environmental protection expense; royalty fee; franchise fee; and other expense.