Number of Construction Establishments Dropped by 5.1 Percent 
 

1. There were an estimated total number of 2,555 construction establishments in business operations during the year 2003, reflecting a decrease of 5.1 percent from the 2,691 construction establishments recorded in 2001 according to the results of the 2003 Annual Survey of Philippine Business and Industry. The general engineering construction industry remained to be the biggest in terms of the number of establishments, as they comprised more than half (50.8 percent or 1,295 establishments) of the total establishments. This industry, which is comprised of establishments engaged in the construction of civil engineering works like roads, bridges, ports and seaports, also declined in the number of establishments by 3.4 percent from 1,340 establishments recorded in 2001. Figure 1 compares the number of establishments by industry in 2003 and 2001.

Employment Significantly Declined by 23.7 Percent 
 

2. Total employment by all construction establishments during the year 2003 was estimated to be 119,161. This figure represents a drop by 23.7 percent from the total employment of 156,201 workers recorded in 2001. 
    
3. The general engineering construction industry, having numerous number of establishments, remained to be the largest employer numbering to 65,972 or 55.4 percent of total employment.Figure 2 shows the distribution of employment by industry in 2003.

Average Monthly Compensation per Construction Worker Grew by 3.1 Percent in Real Terms 
 

4. Total compensation paid by construction establishments during the year 2003 amounted to P11.4 billion translating to an average monthly compensation of P8,075 per construction worker. Compared with the average monthly compensation of P7,351 in 2001, average pay increased by 9.8 percent in nominal terms. In real terms, however, average pay per worker increased by only 3.1 percent. Figure 3 indicates the average monthly compensation in nominal terms by industry in 2003.

Value of Output Decreased to P73.3 Billion 
 

5. Value of output generated in 2003 by all construction establishments decreased by 19.3 percent to P73.3 billion from P90.8 billion estimated during the year 2001. Among industries, only the non-residential building construction industry showed positive growth in their value of output. Value of output for non-residential building construction industry grew by 7.3 percent to P12.0 billion from P11.2 billion recorded in 2001. Figure 4 compares the value of output by industry in 2003 and 2001.

Labor Productivity per Construction Worker was P205,024 
 

6. Labor productivity, measured as the ratio of census value added per paid employee, was P205,024 per construction worker. Figure 5 displays labor productivity by industry in 2003.

 
 

TECHNICAL NOTES

Scope and Coverage

The 2003 Annual Survey of Philippine Business and Industry (ASPBI) aimed to collect and generate information on the levels, structure and trends of economic activities of businesses and industries in the entire country. It has the calendar year, 2003, for its reference period. One of the 14 sectors covered in the survey is the construction sector.

Sample establishments of the 2003 ASPBI were selected using one-stage stratified systematic random sampling.

Response Rate

The response rate is 94 percent of the 723 sample establishments for the construction sector. Adjustments for non-response were made through imputations.

Concepts and Definition of terms

Establishments - An economic unit under single ownership or control, i.e., under a single legal entity, engaged in one predominantly one kind of economic activity at a single fixed location, and having permanency of assets in its premises during the operation. It is also defined as the unit that is engaged in the production of the most homogenous 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.

Construction Establishments - General contractor engaged in the construction, repair or demolition of buildings, highways, airports and other structures; land leveling; earth moving and land reclamation; specialty contractor engaged in only specialized trade or craft like electrical installation, plumbing, painting, air conditioning, well drilling, installation of doors and windows and other work on component parts of the structure.

Economic activity or business is the activity of the establishment as classified under the 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.

Average total employment (ATE) - is the sum of the number of persons who worked in or for this establishment for all months of the year divided by 12, regardless of the number of months the establishment is in operation.

Total Employment - includes all persons who worked in or for the establishment as of November 15, 2001.

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 establishments. 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.

Working owners - are owners who are actively engaged in the management but do not receive regular pay, i.e., not included in the payrolls. Managers and directors of corporations working for pay are reported as managers.

Total hours worked by construction workers - refers to the number of hours actually spent by construction workers at work, including waiting time and overtime. It excludes time paid for but not spent in work for the establishment such as sick leave and paid vacation leave.

Unpaid workers - are persons working for at least one third of the working time normal to the establishment and do not receive regular pay.

Salaries and wages - are payments in cash or in kind to all employees, prior to deductions for employees contributions to SSS/GSIS, withholding tax, etc. Included are total basic pay, overtime pay and other benefits.

Overtime Pay - are payments given for extra hours worked.

Other benefits - include bonuses, cost of living allowances, commutable transportation and representation allowances, food, housing, commissions paid to salaried employees, separation, retirement, terminal pay, gratuities, etc. Excluded are cost of uniform/working clothes and reimbursable transportation and representation allowances.

Employer's Contribution to SSS/GSIS and the like - refers to payments made by the establishment on behalf of the employees. Examples are SSS, GSIS, Employees Compensation Commission (ECC), Philhealth and PAGIBIG.

Revenue - includes cash received and receivables for goods sold and services rendered. Valuation is at producer's prices (ex-establishment), net of discounts and allowances, including duties and taxes but excluding subsidies.

Value of output - represents the total value of products sold, receipts from contract work and industrial services done for others, receipts from goods sold in the same condition as purchased, fixed assets produced on own account and change in inventories (ending less beginning) of finished goods, work-in-process and goods for resale.

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

Indirect taxes - refer to all taxes, other than income tax, incidental to the production or sale of goods and services, which are chargeable as expenses including business license, BIR stamps, real estate tax and other local taxes.

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 or production and to protect it against competition.

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

Depreciation - is the total amount set aside for the year to cover the decrease in value of fixed assets owned by the establishment because of foreseen obsolescence, wear and tear as a result of operation and normal amount of accidental damage.

Fixed assets produced on own account - refer to the physical assets produced by the establishment for its own use. It is valued at the cost of all work put in place, including overhead.

Capital expenditures - expenditures for fixed assets include cost of acquisition of new and used fixed assets; fixed assets produced by the establishment for its own use; major alterations, additions and improvements to fixed assets, whether done by others or on own account. Fixed assets received from other establishments belonging to the same enterprise are valued as though purchased.

Gross additions to fixed assets - is equal to capital expenditures less sale of fixed assets, including land.

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 should be at current replacement cost in purchasers (market) prices. Replacement cost is the cost of an item in terms of its present price rather than its original cost.

Finished products inventory - refer to the goods made by the establishment which are ready for sale/shipment as of a reference date. Valuation is at producers price.

Work-in-process inventory - refers to the value of all materials which have been partially processed by the establishment but which are not usually sold or turned over to other establishment without further processing. Valuation is at producers price.

Change in inventories - is computed as the total value of ending inventory less the total beginning inventory.

Census value added - represents the difference between the value of output and total costs of materials and supplies consumed, fuels purchased, electricity purchased, industrial services done by others and goods purchased for resale.

Value added - represents the sum of census value added and value of non-industrial services done for others less the cost of non-industrial services done by others and other costs.

Detailed Statistical Tables
The detailed tables at the national and regional levels of the 2003 ASPBI Construction sector are available upon request from the Industry Statistics Division, National Statistics Office, 4th Floor Solicarel Bldg II, Ramon Magsaysay Blvd., Sta. Mesa, Manila Tel. No. (062) 716-39-32. 
 

Source:   National Statistics Office
                 Manila, Philippines