1. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 1 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 The Services Sector in the Philippine System of National Accounts (PSNA) By MARIA FE M. TALENTO Division Head, Economic Statistics Office

2. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 2 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 I. Current PSNA II. Scope/Coverage of the Services sector III. Sources of Data IV. Estimation Methodology V. Issues/Concerns Outline of Presentation

3. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 3 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Current PSNA Current PSNA Measurement of GDP: 3 approaches Production Approach, GDP (P) Expenditure Approach, GDP (E) Income Approach, GDP (I) (compiled annually)

4. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 4 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Current PSNA Quarterly & Annual estimates: the PSNA compilation uses the production & expenditure approaches Both sides of the accounts are estimated independently GDP growth rate is based on the production accounts Constant Price estimates: uses the fixed- based year method

5. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 5 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Scope of the Services sector Transportation, Communications and Storage - Land transport - Water transport - Air transport - Storage and Services Incidental to Transport - Communication Trade - Wholesale - Retail Finance - Banks - Non-banks

6. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 6 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Scope of the Services sector - Insurance Ownership of Dwellings and Real Estate - Ownership of Dwellings - Real Estate Private Services - Educational - Medical and Health - Business - Recreational - Hotel and Restaurant - Others Government Services

7. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 7 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Census/Surveys from National Statistics Office - Census of Philippine Business & Industry (CPBI) - Annual Survey of Philippine Business and Industry (ASPBI) - Quarterly Survey of Philippine Business and Industry (QSPBI) - Quarterly Labor Force Survey (LFS) Main Source of Data Main Source of Data

8. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 8 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Administrative-based data Quarterly Financial Reports from - Securities and Exchange Commission (SEC) for key players of the Services sectors TCS: - Department of Trade and Communications (data on the Metro Rail Transit; Light Rail Transit Authority, Philippine National Railways; Megatren Other Sources of Data Other Sources of Data

9. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 9 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 - Civil Aeronautics Board (for local airlines) ODRE: - National Disaster Coordinating Council (report on Damages of totally destroyed houses) indicator for housing reductions - National Statistics Office (approved building permits for residential construction) indicator for housing additions Administrative-based Data Administrative-based Data

10. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 10 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 FINANCE: - Bangko Sentral ng Pilipinas (consolidated income and expense statements of all banks) - Insurance Commission (income and expense statements of private life and non-life insurance companies) - Commission on Audit (COA) (financial reports of Government Financial Corporations and the Government Service Insurance System (GSIS) Administrative-based Data Administrative-based Data

11. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 11 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 PRIVATE SERVICES: - Department of Tourism (hotel occupancy rate) Administrative-based Data Administrative-based Data

12. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 12 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 GOVERNMENT SERVICES: - Dept. of Budget and Management (actual cash disbursement; budget of expenditure and sources of financing)-Quarterly - Commission on Audit (annual financial report for national and local govt ) - Social Security System and the Government Service Insurance System (GSIS) (annual financial reports) Administrative-based Data Administrative-based Data

13. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 13 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Industry Associations Private Services: - Business Processing Association of the Philippines (BPAP) (data on revenues and employment of Business Processing Outsourcing (BPO) companies Report of Private Companies - Revenue of Selected Fast-Food Chains Other Sources of Data Other Sources of Data

14. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 14 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology (excluding Ownership of Dwellings & Govt services) Annual Estimates: GVA at Current 1. Organized sector: GVA O = GO – II where: GO = Gross Output II = Intermediate Input

15. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 15 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Annual Estimates : GVA at Current 2. Unorganized sector: GVA U = GVA ES * (E LFS - E ASPBI ) where: GVA ES = GVA per employee of small establishments from the ASPBI E LFS = Number of employed persons from the Labor Force Survey (LFS) E ASPBI = Number of employed persons from the ASPBI

16. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 16 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Annual Estimates – GVA at Current Prices of Services: GVA t = GVA Organized + Unorganized

17. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 17 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 -Single deflation using appropriate price indices by sector Constant Price Estimation Constant Price Estimation GVA K = GVA k ( O+U ) IPIN ij where: IPINij = IPIN i(j-1) x Inflation Rate

18. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 18 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 In the absence of annual surveys, use: Extrapolation using output indicator (Gross Revenue from QSPBI) year-on-year growth Current Price Estimation Current Price Estimation GVA ij = GVA i(j-1) x QSPBI(gr) ij where: i = ith quarter j = jth year QSPBI(gr) = Revenue ij / Revenue I(j-1)

19. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 19 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 TCS: CPI for transportation, CPI for communication and CPI for storage Trade: Wholesale - Wholesale Price Index Retail - Retail Price Index Finance, Real Estate and Private Services : - CPI all items Constant Price Estimation Constant Price Estimation

20. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 20 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Ownership of Dwellings: Annual Estimates : starts at GVA Constant GVA k = GVA k (previous year) * trend of Housing Stocks where: Housing stock (in sq/m) = housing stock of the previous year + housing additions – housing reductions

21. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 21 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Housing additions = housing additions of the previous year * trend of the building permits (floor area) Housing reductions = number of totally damaged houses * 15 sq/m (15 sq/m represents the average size of housing units that are most susceptible to total damages)

22. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 22 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Annual Estimates : GVA Current GVA t = GVA k * IPIN t where: IPIN t = IPIN t-1 * trend of CPI for rentals

23. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 23 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Government Services: Annual Estimates : GVA at Current GVA = CE + CCA + IT where: CE = compensation of employees CCA = Depreciation IT = Indirect Taxes

24. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 24 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Estimation Methodology Estimation Methodology Government Services: Annual Estimates: GVA at Constant prices GVA k = GVA t average earnings index where : average earnings index = total compensation divided by the number of govt employees

25. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 25 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 Issues/Concerns Issues/Concerns A. Data Problems Time lag and consistency of survey resultsTime lag and consistency of survey results B. Coverage Issue Emerging Industries Births and deaths of establishments C. Measurement Problems (Methodological) Measuring Quality Change Measuring Quality Change the case of high technology services the case of high technology services

26. Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD 26 International Workshop From Data to Accounts: Measuring Production in National Accounting Beijing, China MFM Talento/ 8-10-June 2009 THANK YOU