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 with 9,250 establishments or 22.2 percent of the total number of establishments ranked next. 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)

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 followed 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 464,176 workers in 2018. This represents an increase of 50.4 percent from the 308,630 workers in 2012. On the average, the industry section employs 11 workers per establishment. (Table A and Figure 1)

Among the industry groups, monetary intermediation activities; and other financial service activities, except insurance and pension funding activities, generated a total of 199,505 (43.0%) and 186,827 (40.2%) workers, respectively. (Table 1A and Figure 3)

Across region, NCR contributed the highest share to total employment, comprising 187,115 workers or 40.3% of the total workforce in the section. Western Visayas and Central Visayas followed with 36,272 (7.8%) and 27,483 (5.9%) workers, respectively. (Table 3A)

Among the 17 regions, NCR and Western Visayas, with 31 and 12 employees per establishment on average, respectively, 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, higher by 97.6% compared to the PhP 148.5 billion in 2012. On the average, the industry section paid PhP 637.6 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 637.6 thousand. These were activities of holding companies (PhP 2.0 million); trusts, funds and other financial vehicles (PhP 1.3 million); insurance (PhP 905.9 thousand); monetary intermediation (PhP 779.4 thousand); activities auxiliary to insurance and pension funding (PhP 696.8 thousand); and pension funding (PhP 669.4 thousand). (Table 1 and Figure 4)

Among regions, firms engaged in financial and insurances activities located in NCR spent the biggest compensation amounting to PhP 176.5 billion or 60.2 percent of the total. Meanwhile, each of the other regions spent less than 5 percent of the total compensation. Only NCR and Davao Region with PhP 944.2 thousand and PhP 793.5 thousand average compensation, respectively, exceeded the national average. (Table 3)

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

The industry section generated a total revenue amounting to PhP 2.288 trillion in 2018. This represents an increase of 103.0 percent from PhP 1.127 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. This was followed by insurance industry group with PhP 533.9 billion (23.3%) and other financial service activities, except insurance and pension funding activities, with PhP 384.4 billion (16.8%). (Table 1A and Figure 5)

Total expenses incurred in 2018 amounted to PhP 1,656.6 billion, a 113.6 percent increase from PhP 775.4 billion in 2012. The three industry groups that contributed the three largest shares in total expenses were the same industry groups that generated the highest revenue. Monetary intermediation activities had PhP 695.1 billion (42.0%) revenue, insurance activities had PhP 444.3 billion (26.8%), and other financial service activities, except insurance and pension funding activities had PhP 222.0 billion (13.4%). (Table A and 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 and pension funding activities, generated less than 2 percent each of the total revenue and total expense. (Table 1A and Figure 5)

Across regions, NCR had the highest contribution to the total revenue and expense for the section in 2018. Total revenue of the region was PhP 1.6 trillion (67.9% share) while total expense was PhP 1.1 trillion (66.7% share). 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 expense ratio generated by all firms of the industry section stood at 1.38, a decrease of 5.0 percent from the 1.45 revenue per expense ratio in 2012. (Table 2)

Pension funding (4.47); activities of holding companies (2.48); trusts, funds and other financial vehicles (2.10); other financial service activities, except insurance and pension funding activities (1.73); fund management activities (1.64); and activities auxiliary to financial service, except insurance and pension funding (1.57) exceeded the revenue per expense ratio 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 1,045.3 billion. This translates to an increase of 76.3 percent from the PhP 593.0 billion in 2012. (Table A)

Among industry groups, monetary intermediation activities contributed the highest value added estimated at PhP 426.5 billion or 40.8 percent of the total. Other financial service activities, except insurance and pension funding activities, which generated an estimated value added of PhP 252.6 billion (24.2%) ranked second, followed by activities of holding companies with PhP 156.9 billion (15.0%).

Meanwhile, pension funding, with PhP 968.0 million or 0.1 percent of the total, generated the least value added. (Table 1A and Figure 6).

NCR dominated in terms of value added generation

The NCR had the highest contribution in total value-added with PhP 708.0 billion or 67.7 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