Computer programming, consultancy and related activities leads among industries

The preliminary results of the 2010 Annual Survey of Philippine Business and Industry conducted nationwide covered a total of 537 establishments with total employment (TE) of 20 and over engaged in Information and Communication. As shown in Table 1, computer programming, consultancy and related activities industries lead the section with 181 (33.7%) establishments. Publishing of books, periodicals and other publishing activities and radio broadcasting followed with 70 (13.0%) and 52 (9.7%) establishments, respectively. Figure 1 shows the percentage distribution of establishments by industry group in 2010.

Most of the establishments are in National Capital Region (NCR)

At the regional level, NCR had the most number of establishments with 377 or 70.2 percent of the total. Central Visayas placed second with 41 establishments (7.6%) followed by Central Luzon with 23 (4.3%) establishments. (Table 2)

Computer programming, consultancy and related activities generates highest employment

Information and Communication section provided employment to some 85,998 workers in 2010. Of the total workforce, paid workers comprised 85,878 or 99.9 percent.

Among industry groups, computer programming, consultancy and related activities generated the highest number of employee with 21,338 (24.8%) workers followed closely by data processing, hosting and related activities; web portals with 21,250 (24.7%) workers. Wired telecommunications activities ranked third in the industries that hired jobs with 15,976 (18.6%) workers. Figure 2 shows the distribution of employment by industry group.

Among regions, NCR was the top employer with 68,942 employees (80.2%). Central Visayas and Central Luzon followed with 9,005 (10.5%) and 2,378 (2.8%), respectively.

The section’s average employment stood at 160 employees per establishment. Data processing, hosting and related activities; web portals registered the highest national average at 462 employees per establishment. Three other industries surpassed the section’s average, namely, composed of wired telecommunications activities, wireless telecommunications activities, and television programming and broadcasting activities with 456, 317 and 186 employee per establishment, respectively.

Wired telecommunications activities pays the highest compensation

Total compensation paid by Information and Communication section amounted to PHP47.0 billion, an equivalent of PHP547,330 average annual compensation. Out of the total, PHP43.0 billion (91.5%) comprised the salaries and wages while employer’s contribution to SSS/GSIS and the like amounted to PHP1.5 billion (3.2%). The remaining PHP2.5 billion (5.2%) was intended for separation, retirement, terminal pay, gratuities and others.

By industry group, wired telecommunications activities paid the highest compensation to its employees amounting to PHP19.6 billion or 41.8 percent of the total. Next is computer programming, consultancy and related activities paying PHP10.4 billion or 22.1 percent while data processing, hosting and related activities; web portals is the third highest paying industry with PHP6.8 billion (14.4%). Figure 3 shows the compensation by industry for the section.

Wired telecommunications activities employees earn the highest with PHP1.2 million

Wired telecommunications activities employees were the highest earners in 2010 with an average annual compensation of PHP1.2 million. Employees of other information service activities and software publishing followed next with PHP918,785 and PHP762,999, respectively. On the other hand, radio broadcasting employees received the lowest annual pay of PHP174,616. Figure 4 shows five leading industries with highest annual compensation in 2010.

By region, NCR-based workers received the highest average annual compensation of PHP620,395 followed by Central Visayas-based workers with PHP349,040. Employees from Ilocos Region came in third with PHP235,649 annual remuneration.

Wired telecommunications activities is highest in revenue and cost

Gross revenue for the section in 2010 was estimated at PHP337.5 billion. The top revenue generators were the following: wired telecommunications activities earned PHP198.3 billion (58.7%); radio broadcasting with PHP32.2 billion (9.5%); computer programming, consultancy and related activities with PHP26.5 billion (7.9%).

Most of the revenue of the section came from NCR with PHP324.4 billion (96.1%). Central Visayas contributed almost PHP8.0 billion (2.4%) and Central Luzon, PHP1.2 billion (0.4%).

Costs for operating the section less compensation totaled to more than PHP165.3 billion. Almost half of the total cost was spent by wired telecommunications activities with PHP81.3 billion (49.2%). Radio broadcasting incurred the second highest cost with PHP20.1 billion (12.2%) followed by wireless telecommunications activities with PHP15.6 billion (9.4%).

Regionwise, NCR incurred the highest cost among regions amounting to PHP159.0 billion while Caraga recorded the least with PHP7.3 million. Figure 5 shows the distribution of revenue and cost by industry group for the section in 2010.

Revenue-cost ratio rates to 2.04

The revenue generated an amount of PHP2.04 for every peso cost for the section. Among industries, data processing, hosting and related activities; web portals recorded the highest revenue-cost ratio with PHP3.24 followed by wired telecommunications activities with PHP2.44. Computer programming, consultancy and related activities with PHP2.01 came in third.

Value added amounts to PHP170.5 billion.

Value added was estimated at PHP170.5 billion. More than three-fourths (78.7%) or PHP134.2 billion of the total value added of the section was contributed by the following industry groups: Wired telecommunications activities with PHP104.8 billion (61.5%), Radio broadcasting with PHP15.3 billion (9.0%) and computer programming, consultancy and related activities with PHP14.0 billion (8.2%). 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 PHP3.9 million. Workers in wired telecommunications activities establishments were the most productive in terms of revenue per employee with PHP12.4 million exceeding the national average for revenue per employee. Radio broadcasting ranks second with PHP9.3 million. Data processing, hosting and related activities; web portals industry, on the other hand, recorded the least with only PHP627,895.

Value added per employee, another measure of labor productivity, was valued at PHP2.0 million per employee. Among industries, wired telecommunications activities establishments had the highest average of PHP6.6 million followed by radio broadcasting and television programming and broadcasting activities with PHP4.4 million and PHP2.9 million, respectively.

Gross addition to fixed assets accumulates to PHP41.2 billion

Gross addition to fixed assets in 2010 totaled PHP41.2 billion with the wireless telecommunications activities recording the highest amount of PHP23.3 billion (56.4%). Wired telecommunications activities followed with PHP11.0 billion (26.7%) and radio broadcasting with PHP3.0 billion (7.3%).

Total change in inventories sum up to PHP180.4 million

Change in inventories, defined as the value of ending inventory less the beginning, amounted to PHP180.4 million for this section in 2010. Among industries, wired telecommunications activities recorded the highest with PHP127.3 million, while seven industries reported negative inventories amounting to PHP80.3 million.

Government grants PHP4.0 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 television programming and broadcasting activities industry out of the 13 industries received government subsidies amounting to PHP4 million.

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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:

 

TE Code	Total Employment	TE Code	Total Employment
0	1 - 4	5	100 - 199
1	5 - 9	6	200 - 499
2	10 - 19	7	500 - 999
3	20 - 49	8	1000 - 1999
4	50 - 99	9	2000 and Over

 

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 614 or 93.88 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.

Valued added is gross output less intermediate cost.

Gross output (for Monetary intermediation and Other financial service activities, except insurance and pension funding activities) is equal to the sum of total revenue (less rent income from land, delivery charges separately invoiced to customers, royalty income and franchise income) less interest expense plus capital expenditures of fixed assets produced on own account.

Gross output (for Insurance and Pre-need plan activities) is equal to the sum of total revenue (less rent income from land, delivery charges separately invoiced to customers, royalty income and franchise income) less insurance claims paid plus capital expenditures of fixed assets produced on own account.

Intermediate cost is equal to the sum of the following cost items: materials and supplies; fuels, lubricants, oils and greases; electricity and water; cost of industrial services done by others; cost of non-industrial services done by others (less rent expense for land); research and experimental development expense; environmental protection expense; royalty fee; franchise fee and other cost; less change in inventory of materials and supplies; fuels, lubricants, oils and greases.

Tangible 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 tangible 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.

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.

 

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Source:   National Statistics Office
                Manila, Philippines