Computer programming, consultancy and related activities leads among industries

The final results of the 2010 Annual Survey of Philippine Business and Industry conducted nationwide covered a total of 1,736 establishments for all employment sizes engaged in Information and communication. As shown in Table 1, computer programming, consultancy and related activities industries led the section with 437 (25.2%) establishments. Other telecommunications activities and radio broadcasting followed with 282 (16.2%) and 263 (15.1%) establishments, respectively. Figure 1 shows the percentage distribution of establishments by industry group in 2010.

Computer programming, consultancy and related activities generates highest employment

Information and Communication section provided employment to some 110,758 workers in 2010. Of the total workforce, paid workers comprised 110,199 or 99.5 percent.

Among industry groups, computer programming, consultancy and related activities generated the highest number of employee with 26,448 (23.9%) workers followed closely by data processing, hosting and related activities; web portals with 23,785 (21.5%) workers. Wired telecommunications activities ranked third in the industries that hired jobs with 18,110 (16.4%) workers. Figure 2 shows the distribution of employment by industry group.

The section’s average employment stood at 64 employees per establishment. Wireless telecommunications activities registered the highest national average at 410 employees per establishment. Three other industries surpassed the section’s average, namely, wired telecommunications activities, data processing, hosting and related activities; web portals, and television programming and broadcasting activities with 318, 264 and 78 employees per establishment, respectively.

Wired telecommunications activities pays the highest compensation

Total compensation paid by Information and Communication section amounted to PHP54.9 billion, an equivalent of PHP498,075 average annual compensation. By industry group, wired telecommunications activities paid the highest compensation to its employees amounting to PHP19.9 billion or 36.3 percent of the total. This was followed by computer programming, consultancy and related activities paying PHP12.6 billion or 22.9 percent while data processing, hosting and related activities; web portals occupied the third highest paying industry with PHP7.6 billion (13.9%). Figure 3 shows the compensation by industry for the section.

Wired telecommunications activities employees earn the highest with PHP1.1 million

Wired telecommunications activities employees were the highest earners in 2010 with an average annual compensation of PHP1.1 million. Employees of other information service activities and software publishing followed next with PHP909,261 and PHP772,891, respectively. On the other hand, radio broadcasting employees received the lowest annual pay of PHP189,819. Figure 4 shows five leading industries with highest annual compensation in 2010.

Wired telecommunications activities is highest in revenue and cost

Gross revenue for the section in 2010 was estimated at PHP442.5 billion. The top revenue generators were the following: wired telecommunications activities earned PHP199.4 billion (45.1%); and wireless telecommunications activities with PHP93.3 billion (21.1%). These two industries contributed two-thirds of the total revenue for the sector.

Costs for operating the section less compensation totaled to more than PHP236.6 billion. Largest part of the total cost was spent by wired telecommunications activities with almost PHP82.0 billion (34.6%). Wireless telecommunications activities incurred the second highest cost with PHP64.8 billion (27.4%) followed by radio broadcasting with PHP21.6 billion (9.1%).

Revenue-cost ratio rates to 1.87

The revenue generated an amount of PHP1.87 for every peso cost for the section. Among industries, data processing, hosting and related activities; web portals recorded the highest revenue-cost ratio with 3.20 followed by wired telecommunications activities with 2.43. Computer programming, consultancy and related activities with 1.98 came in third.

Value added amounts to PHP228.3 billion.

Value added was estimated at PHP228.3 billion. More than three-fourths (77.4%) or PHP176.7 billion of the total value added of the section was contributed by the following industry groups: Wired telecommunications activities with PHP105.3 billion (46.1%); wireless telecommunications activities with PHP53.8 billion (23.6%); and computer programming, consultancy and related activities with PHP17.6 billion (7.7%). Figure 6 shows the value added by industry for the section.

Workforce in wired telecommunications activities are the most productive

The national average for revenue per employee for the section was recorded at about PHP4.0 million. Workers in wired telecommunications activities establishments were the most productive in terms of revenue per employee with PHP11.0 million exceeding the national average for revenue per employee. Other industries that surpassed the national average includes, wireless telecommunications activities, radio broadcasting, other information service activities and television programming and broadcasting activities with PHP8.8 million, PHP6.7 million, PHP5.6 million and PHP5.4 million, respectively.

Value added per employee, another measure of labor productivity, was valued at PHP2.1 million per employee. Among industries, wired telecommunications activities establishments had the highest average of PHP5.8 million followed by wireless telecommunications activities and radio broadcasting with PHP5.0 million and PHP3.2 million, respectively.

Gross additions to fixed assets accumulates to PHP67.3 billion

Gross additions to fixed assets in 2010 totaled PHP67.3 billion with the wireless telecommunications activities recording the highest amount of PHP48.5 billion (72.0%). Wired telecommunications activities followed with PHP11.0 billion (16.4%) and radio broadcasting with PHP3.3 billion (4.9%).

Total change in inventories sum up to PHP770.9 million

Change in inventories, defined as the value of ending inventory less the beginning, amounted to PHP770.9 million for this section in 2010. Among industries, wireless telecommunications activities recorded the highest with PHP526.4 million, while six industries reported negative inventories amounting to PHP36.5 million.

Government grants PHP4.9 million subsidies

Subsidies are special grants received from the government in the form of financial assistance or tax exemption or tax privilege to aid and develop an industry. For 2010, only two out of the 13 industries received government subsidies. These were: television programming and broadcasting activities; and radio broadcasting with PHP4.0 million and PHP900 thousand, respectively.

TECHNICAL NOTES

Introduction

The 2010 Annual Survey of Philippine Business and Industry (ASPBI) is a continuing activity of the National Statistics Office (NSO) which aims to provide key measures on the performance, levels, structure and trends of economic activities in the entire country for the year 2010. It is one of the designated statistical activities of the government and as such the survey generates the most critical and essential statistics required for economic planning and analysis..

The 2009 Philippine Standard Industrial Classification (PSIC) shall be adopted for the first time in this round. This is the latest version of the classification of industries in the country released by the NSCB after the 1994 PSIC was amended in 2002. It conforms with the International Standard Industrial Classification (ISIC) Revision 4 prescribe by the United Nations, but with modifications to suit national situation and requirement. The PSIC is a statistical classification of all economic activities, designed as a guide and a comprehensive framework for securing uniformity and comparability of both the government and private sectors..

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 2010 ASPBI covered establishments engaged in 18 economic sections classified under the 2009 Philippine Standard Industrial classification (PSIC) namely:

• Agriculture, Forestry and Fishing
• Mining and Quarrying
• Manufacturing
• Electricity, Gas, Steam and Air Conditioning Supply
• Water Supply, Sewerage, Waste Management and Remediation Activities
• Construction
• Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles
• Transportation and Storage
• Accommodation and Food Service Activities
• Information and Communication
• Financial and Insurance Activities
• Real Estate Activities
• Professional, Scientific and Technical Services
• Administrative and Support Service Activities
• Education
• Human Health and Social Work Activities
• Arts, Entertainment and Recreation
• Other Service Activities

The scope of the ASPBI was confined to “formal sector” only, which consists 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 2010 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 organizations relates 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 provides 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
• Stock Corporation is an ordinary business corporation organized by private persons, created and operated for the purpose of making a profit which may be distributed in the form of dividends to stockholders on the basis of their invested capital. The establishment’s name includes words such Corporation or Corp, Incorporated or INC
• Non-Stock, Non-Profit Corporation is a business corporation which does not issue stocks to its members and is created not to profit but for the public good and welfare. Of this character are most of the religious, social, charitable, educational, literary, scientific, civic and political organizations and societies. The establishment’s name includes words such as Corporation or Corp., Incorporated or Inc.
• Cooperative is an organization composed primarily of small producers/consumers who voluntarily join together to form a business enterprise, which they themselves own, control and patronize. The establishment’s name includes words such as Cooperative or COOP
• Others are organizations not classified in any of the above classification. It includes private associations, foundations, Non-Governmental Organization, or other forms of legal organizations.

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

The 2009 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 S. 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 total employment (TE). The following are the employment size classification used in the 2010 ASPBI:

The geographic or physical location of the establishments was classified in accordance with the Philippine Standard Geographic Code (PSGC) as of December 31, 2010 which contains the latest updates on the number of regions, provinces, cities, municipalities and barangays in the Philippines.

The geographic domains of the 2010 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 2010 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 2,008 or 96.45 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 2009 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, 2010.

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.

Cost 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.

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

Gross additions to tangible fixed assets is the sum of cost 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.

Valued added added is gross output less intermediate input. Gross output for accommodation and food service activities is the sum of the total revenue (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 cost items: materials and supplies purchased; fuels, lubricants, oils and greases purchased; electricity and water purchased; cost of industrial services done by others; cost of non-industrial services done by others; goods purchased for resale; research and experimental development expense; environmental protection expense; royalty fee; franchise fee and other cost.

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 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.