Number of establishments grows by 22.8 percent

The preliminary results of the 2012 Census of Philippine Business and Industry (CPBI) showed that there were 901 establishments with total employment (TE) of 20 and over engaged in construction. This number was higher by 22.8 percent from the 734 establishments recorded in 2010. The growth in the number was due to 137 newly listed establishments in the 2012 List of Establishments and a shift in size classification of 30 establishments to stratum TE of 20 and over employees.

Construction of buildings recorded the most number of establishments with 321 accounting for 35.6 percent of the total. This was followed by construction of roads and railways with 260 establishments or 28.9 percent share to total. Electrical, plumbing and other construction installation activities ranked third with 186 establishments or 20.6 percent of the total count. The shares of other industries to the total number of construction establishments were as follows:

• Construction of utility projects with 45 establishments (5.0%)
• Other specialized construction activities 33 establishments (3.7%)
• All other construction activities 56 establishments (6.2%)

Figure 1 shows the distribution of construction establishments with TE of 20 and over by industry group in 2012.

 

 

Regionwise, National Capital Region (NCR) remained highest in terms of the number of construction establishments with 431 or 47.8 percent of the total. CALABARZON ranked a far second with 96 or 10.7 percent of the total. CARAGA and MIMAMOPA recorded the least count with only 11 establishments (1.2%) each. Meanwhile, no construction establishment was located in ARMM in 2012.

Figure 2 shows the regional distribution of construction establishments with TE of 20 and over in 2012.

 

 

Employment increases by 47.8 percent

In 2012, construction establishments with TE of 20 and over employed a total of 192,042, representing an increase of 47.8 percent from the employment figure of 129,948 recorded in 2010.

By industry group, construction of buildings employed the most number of workers with 76,401 or 39.8 percent of the total, followed by construction of roads and railways with 70,522 workers or 36.7 percent. Electrical, plumbing and other construction installation activities ranked third with 28,375 workers (14.8%). Figure 3 shows the distribution of employment for construction establishments with TE of 20 and over by industry group in 2012.

 

 

NCR, having the most of the number of establishments, employed the bulk of workers reaching 134,203 or 69.9 percent of the total. Central Visayas with 15,942 (8.3%) workers ranked a far second. Completing the top three regions with the most number of workers is CALABARZON with 11,906 (6.2%).

The average number of workers per establishment for the sector was recorded at 213. Construction of roads and railways registered the highest with 271 workers per establishment, followed by construction of buildings and construction of utility projects with 238 and 161 workers per establishment, respectively.

 

Average annual pay is PHP 225,743

Total compensation paid in 2012 amounted to PHP43.3 billion, indicating an average annual compensation of PHP225,743 per employee. Compared to the average annual pay of PHP155,850 in 2010, average pay increased by 44.8 percent. In real terms, however, average pay per worker increased by only 34.2 percent.

Employees working in electrical, plumbing and other construction installation activities received the highest average annual compensation amounting to PHP271,797. Average annual pay of employees working for construction of roads and railways was placed at PHP251,356 and construction of other civil engineering projects at PHP246,619 per employee. Figure 4 compares the average annual compensation of employees for construction establishments with TE of 20 and over by industry group in 2012 and 2010.

 

By region, employees in Bicol Region received the highest average annual pay of PHP288,201, experiencing 55.2 percent increase in real terms from PHP172,648 received in 2010. This was followed by employees in Cagayan Valley and NCR receiving an average annual compensation of PHP275,344 and PHP253,752, respectively. In real terms, this is equivalent to PHP209,866 for Cagayan Valley and PHP203,980 for NCR.

 

Value of output posts 56.6 percent growth

Total value of output generated by establishments with TE of 20 and over amounting to PHP247.0 billion increased by 56.6 percent compared with PHP157.8 billion produced in 2010.

By industry, about half (45.8%) or PHP113.1 billion of the total value of output was produced by construction of buildings. This was followed by construction of roads and railways with output share of PHP90.3 billion (36.5%). The shares of other industries to the total value of output were as follows:

• Electrical, plumbing and other construction installation activities, PHP30.9 billion (12.5%)
• Construction of utility projects, PHP3.7 billion (1.5%)
• Other specialized construction activities, PHP2.7 billion (1.1%)
• All other construction activities, PHP6.3 billion (2.5%)

Figure 5 shows the distribution of value of output for construction establishments with TE of 20 and over by industry group in 2012.

 

Among regions, NCR shared the biggest output value amounting to PHP184.2 billion, comprising 74.6 percent of the total value of output. This was distantly followed by Central Visayas with an output value of PHP14.9 billion (6.0%). CALABARZON came in third with total output value of PHP11.4 billion (4.6%).

 

Total expense amounts to PHP229.8 billion

Total expense in 2012 incurred in construction operation amounted to PHP229.8 billion.

Among industries, construction of buildings incurred the highest expense amounting to PHP104.1 billion or 45.3 percent of the total. Construction of roads and railways placed second with PHP84.6 billion (36.8%). Electrical, plumbing and other construction installation activities followed next with a total expense of PHP28.5 billion (12.4%).

NCR spent the highest among the regions at PHP170.7 billion (74.3%). This was followed distantly by Central Visayas and CALABARZON spending PHP14.0 billion (6.1%) and PHP10.8 billion (4.7%), respectively.

 

Construction of buildings records the highest returns

Income per expense ratio for establishments with TE of 20 and over in 2012 was recorded at 1.10, indicating that for every peso spent PHP1.10 was realized in terms of income.

Among industries, construction of buildings recorded the highest income per expense ratio of 1.11. The income-expense ratio of other industries were as follows:

• Electrical, plumbing and other construction installation activities (1.10 income per peso expense)
• Construction of roads and railways (1.09 income per peso expense)
• Other specialized construction activities (1.08 income per peso expense)
• Construction of other civil engineering projects (1.04 income per peso expense)
• All other construction activities, (1.04 income per peso expense)

Among regions, establishments in Cagayan Valley registered the highest return at 1.32 income per peso expense. Zamboanga Peninsula and MIMAROPA followed next with 1.21 and 1.13 income per peso expense, respectively.

 

Value added rises by 150.8 percent

In 2012, value added generated by the establishments with TE of 20 and over reached PHP98.3 billion, increasing by 150.8 percent from PHP39.2 billion produced in 2010.

Among industries, construction of buildings contributed the biggest share amounting to PHP44.9 billion or 45.7 percent of the total. Construction of roads and railways ranked second with PHP36.7 billion (37.4%) while electrical, plumbing and other construction installation activities came next with PHP12.5 billion (12.8%).

By region, NCR contributed the biggest share with PHP78.2 billion or 79.6 percent of the total value added, followed by Central Visayas with PHP4.7 billion (4.8%) and CALABARZON with PHP 4.1 billion (4.2%).

 

Labor productivity is PHP511.7 thousand per worker

Labor productivity, defined as value added per worker, was estimated at PHP511.7 thousand per worker, higher by 69.7 percent compared to PHP301.5 thousand recorded in 2010.

By industry group, the highest labor productivity was recorded by construction of buildings with PHP587.1 thousand per worker. Construction of roads and railways followed with PHP521.0 thousand per worker. Labor productivity of other industries were as follows:

• Electrical, plumbing and other construction installation activities (PHP441.6 thousand per worker)
• Construction of other civil engineering projects (PHP415.2 thousand per worker)
• Other specialized construction activities (PHP265.3 thousand per worker)
• All other construction activities (PHP225.2 thousand per worker)

 

Figure 6 shows the labor productivity for construction establishments with TE of 20 and over by industry group in 2012.

 

Among regions, Cagayan Valley was the most productive generating PHP944.3 thousand per worker. This was followed by Caraga with PHP762.1 thousand per worker and NCR with PHP582.6 thousand per worker.

 

Gross addition to tangible fixed assets reaches PHP12.0 billion

Gross addition to tangible fixed assets, defined as capital expenditures less sale of fixed assets, rose by 296.8 percent to PHP12.0 billion in 2012 from PHP3.0 billion in 2010.

Construction of buildings with PHP6.6 billion, accounted for more than half (54.9%) of the total gross addition to tangible fixed assets, followed by construction of roads and railways with PHP4.7 billion (39.4%). Other industries gross addition to fixed assets were as follows:

• Electrical, plumbing and other construction installation activities with PHP474.9 million (4.0%)
• Construction of utility projects with PHP73.3 million (0.6%)
• Other specialized construction activities with PHP69.2 million (0.6%)
• All other industries with PHP72.0 million (0.6%)

 

Total subsidies received amounts to PHP10.9 million

Total subsidies provided by the government to support the business operation of construction establishments with TE of 20 and over amounted to PHP10.9 million.

Construction of roads and railways received PHP7.7 million (70.8%) of the total and the remaining PHP3.2 million (29.2%) by construction of utility projects.

 

Total assets is PHP415.8 billion

Total assets for construction establishments with TE of 20 and over was valued at PHP415.8 billion in 2012.

Other specialized construction activities with PHP223.7 billion accounted for more than half (53.8%) of the total assets, the highest among the industries. This was followed by construction of roads and railways with PHP90.4 billion (21.7%) and construction of buildings with PHP79.7 billion (19.2 %).

At the regional level, NCR had the highest total assets worth PHP377.3 billion (90.7%), followed far behind by Central Visayas with PHP9.4 billion (2.3%) and CALABARZON with PHP6.4 billion (1.5%).

 

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TECHNICAL NOTES

 

Introduction

This special release presents the preliminary results of the 2012 Census of Philippine Business and Industry (CPBI) for the Construction (Sector F) for establishments with total employment of 20 and over.

The 2012 CPBI is a forerunner of the 2006 CPBI and one of the designated statistical activities of the former National Statistics Office (NSO) now Philippine Statistics Authority (PSA). Data collected from the census provide information on the levels, structure, performance, and trends of economic activities of the country. It also serves as benchmark information in the measurement and comparison of national and regional economic growth.

The census was conducted nationwide in April 2013 with the year 2012 as the reference period of data, except for employment which is as of November 15, 2012. 

The income and expense account in the Financial Statement of establishment was adopted in the design of sectoral questionnaires to capture data for the 2012 CPBI. This allowed respondents of the census an ease in accomplishing the questionnaires. Income and revenue have the same concept in recording financial transaction of establishments while expense is cost incurred on a consumed basis.

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

 

Legal Authority

The conduct of the CPBI is governed by authority of the following legislative acts and presidential directives:

• Commonwealth Act No. 591 (An Act to Create the Bureau of the Census and Statistics to consolidate statistical activities of the government therein)

• Presidential Decree No. 418 (Reconstituting the Bureau of the Census and Statistics as a new agency to be known as the National Census and Statistics Office, under the administrative supervision of the National Economic Development Authority)

• Executive Order No. 121 (Reorganization Act of the Philippine Statistical System)

• Executive Order 352 (Designation of Statistical Activities that will generate critical data for decision-making by the Government and the Private Sector)

• Executive Order 5  (Strengthening the National Statistics Office)

 

Scope and Coverage

The 2012 CPBI 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 census was confined to the formal sector of the economy, which consists of the following:

• Corporations and partnership
• Cooperatives and foundations
• Single proprietorship with employment of 10 and over
• Single proprietorships with branches

 

Unit of Enumeration

The units of enumeration for the 2012 CPBI are the establishment and enterprise. However, this special release is confined to the results of construction sector with establishment as the unit of enumeration.

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.

For the construction sector, the establishment is defined in operational terms to take into account the organization and record-keeping practices by making the single physical location and activity criteria more flexible, hence, the kind-of-activity unit (KAU) was used. KAU is ‘the unit that is engaged in the production of the most homogeneous group of goods and services, usually at one location, but sometimes over a wider area, for which separate records are available that can provide data concerning the production of these goods and services and the materials, labor and physical resources used in this production.”

 

Classification 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.

The industrial classification of an economic unit was determined by the activity from which it derives its major income or revenue.  The 2009 PSIC was utilized to classify economic units according to their economic activities.

The size of an establishment is determined by its total employment (TE) as of specific date. 

Geographic Classification. Establishments are also classified by geographic area using the Philippine Standard Geographic Code (PSGC) classification.

 

Methodology

Establishments with TE of 20 and over in the formal sector for the Construction Sector were covered on a 100 percent or on a certainty basis because of their relatively small number.

The estimate of the total of a characteristic for the certainty employment stratum in TE of 20 and over in an industry domain in each geographic domain (region) is

where:

p = 1, 2,..., 17 regions (geographic domains)

x_pj = value of the j^th establishment with TE of 20 and over in an industry domain within each region

j = 1, 2, 3, …, m_p establishments

m_p = number of establishments with TE of 20 and over in an industry domain within each region

National level estimate of a characteristics by industry domain was obtained by aggregating separately the estimates  for the particular industry domain from all the regions.

Response Rate

Response rate for Construction Sector for establishments with TE of 20 and over was 92.0 percent (1,046 out of 1137 establishments). This included receipts of "good" questionnaires, partially accomplished questionnaires, reports of closed, moved out or out of scope establishments. 

Reports of the remaining non-reporting establishments were imputed based on established imputation methods and from other available administrative data sources.  However, reports of establishments which were found to be duplicates and out of business in 2012, were not imputed.

 

Limitation of Data

Only the formal sector was covered in the survey.

Data for demolition and site preparation, and building completion and finishing activities were suppressed so as not to disclose individual establishment’s data.

Concepts and Definitions of Terms

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 November 15, 2012.

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 includes 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.

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.

Cost refers to all expenses incurred during the year whether paid or payable. Valuation is at purchaser prices 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.

Expense refers to cost incurred by the establishment during the year whether paid or payable. This is treated on a consumed basis.

Intermediate expense are expenditures incurred in the production of goods such as materials and supplies purchased, fuels purchased, electricity and water purchased, and industrial services done by others plus beginning inventory of materials, supplies and fuels less ending inventory of materials, supplies and fuels.

Value added is gross output less intermediate cost. Gross output for the construction sector is value of output plus non-industrial services done for others (except rent income from land). Intermediate input is intermediate expenses plus non-industrial services done by others (except rent expense for land) and other costs.

Value of output represents the sum of the receipts from value of domestic construction put in place, net income from construction activities abroad, industrial services done for others, value of products manufactured and goods sold in the same condition as purchased less the cost of goods sold; and  value of fixed assets produced on own account and change in inventories of construction-in-progress, finished products and work-in-progress.

Gross addition to tangible fixed assets is equal to capital expenditures less sale of fixed assets, including land.

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

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

Subsidies are all special grants in the form of financial assistance or tax exemption or tax privilege given by the government to aid and develop an industry.

Total assets are resources including land owned and/or controlled by the establishment as a result of past transactions and events from which future economic benefits are expected to flow to the establishment.