1 Measuring International Trade in Services

2 OUTLINE OF PRESENTATION Introduction Introduction - Legal Framework - Balance of Payments (BOP) Compilation Trade in Services Trade in Services  Major Classifications  Data Sources  Limitations of Data Sources Organizational & Data Processing Organizational & Data Processing Data Availability Data Availability Current Developments Current Developments Future Directions Future Directions Recommendations Recommendations

3 LEGAL FRAMEWORK Section 22 of Republic Act No (Central Bank Act) states that the BSP shall prepare data among others, the Balance of Payments (BOP) statistics for the guidance of Monetary Board in policy formulation and implementation Section 22 of Republic Act No (Central Bank Act) states that the BSP shall prepare data among others, the Balance of Payments (BOP) statistics for the guidance of Monetary Board in policy formulation and implementation Executive Order No. 352 authorizes the BSP to undertake the compilation and provision of data on BOP accounts to the Office of the President and the general public with periodicity of quarterly and annual dissemination. Executive Order No. 352 authorizes the BSP to undertake the compilation and provision of data on BOP accounts to the Office of the President and the general public with periodicity of quarterly and annual dissemination.

4 LEGAL FRAMEWORK The BSP has no explicit legal authority to collect information from the private non - banks corporations and households. The BSP has no explicit legal authority to collect information from the private non - banks corporations and households. However, implied under the Designated Statistics Act is the BSP’s mandate to collect information for BOP compilation. However, implied under the Designated Statistics Act is the BSP’s mandate to collect information for BOP compilation. BSP’s surveys of private entities get legal support when they pass through the NSCB’s survey clearance system. BSP’s surveys of private entities get legal support when they pass through the NSCB’s survey clearance system.

5 On BOP Compilation The BSP is the sole agency designated to generate the balance of payments (BOP) statistics.

6 Trade in Services Account

7 l Transportation(Passenger, Freight) l Travel l Communication l Insurance l Construction l Financial MAJOR CLASSIFICATIONS:

8 l Computer and information l Royalties and license fees l Other business services (Merchanting, operational leasing, miscellaneous business, technical, professional) l Personal, cultural, and recreational services services l Government services MAJOR CLASSIFICATIONS:

9 l Transportation services of which: of which: Passenger - ITRS, ticket sales of Passenger - ITRS, ticket sales of local/foreign airlines local/foreign airlines Freight - Foreign Trade Statistics Freight - Foreign Trade Statistics Others - Bank reports, other Others - Bank reports, other receipts of local/foreign airlines receipts of local/foreign airlines DATA SOURCES

10 l Travel 1. Tourism related - Visitor Sample Survey of the Department of Tourism for receipts; Bank reports Survey of the Department of Tourism for receipts; Bank reports for payments 2.Others - estimates of living expenses abroad of residents working abroad. 2.Others - estimates of living expenses abroad of residents working abroad. DATA SOURCES

11 l Communication - Bank reports Cross Border Transaction Survey (CBTS) l Insurance - Foreign Trade Statistics l Construction - Bank reports and CBTS l Financial - Bank reports and CBTS l Computer and Information Services - Bank reports and CBTS - Bank reports and CBTS DATA SOURCES

12 l Royalties & License Fees - Bank reports l Other Business Services of which: of which: Merchanting - Bank reports Operational Leasing - Bank reports and expenditures of local airlines. airlines. DATA SOURCES

13 l Personal, Cultural & Recreational - Bank reports Bank reports l Government Services, n.i.e. - Expenditures/Budget of Department of Foreign Affairs for Embassies and Consulates abroad. Consulates abroad. DATA SOURCES

14 l Bank reports capture only the transactions passing through the banking system l Bank reports are prone to misclassification l Cross Border Transactions Survey is limited in purpose (only covers accounts abroad and inter company offsetting accounts) and coverage (top companies that are mostly exporters of goods) l Administrative databases do not always provide the required necessary details. LIMITATIONS OF DATA SOURCES

15 l Bangko Sentral ng Pilipinas - agency primarily responsible for ITS Statistics Other Agencies with significant ITS Statistical roles: -National Statistical Coordination Board -Department of Trade and Industry ORGANIZATIONAL AND DATA PROCESSING

16 l Supplementary data from: -National Statistics Office (NSO) -Department of Tourism (DOT -Department of Foreign Affairs (DFA0 -Civil Aeronautics Board (CAB) -Asian Development Bank (ADB) -Organization for Economic Co-operation and Development (OECD) ORGANIZATIONAL AND DATA PROCESSING

17 ORGANIZATIONAL AND DATA PROCESSING Number of staff Number of staff - Direct Compiler of ITS -1 staff - ITRS - 2 staffs - CBTS - 2 staffs l Electronic Reporting System

18 DATA AVAILABILITY l BOP (BPM5 Concept) to 2007 revised series revised series l BOP (Old Concept) l Timeliness/Time-lag - On time/11-12 weeks l Revision Policy: -Quarterly data - any quarter of the reference year the reference year

19 DATA AVAILABILITY l Revision Policy: -Annual data - coincides with the release of the second quarter report in September of the current year and the fourth quarter report in March the fourth quarter report in March of the succeeding year. -Historical - are carried out in case of introduction of new classifications, compilation frameworks and methodologies.

20 Difficulty of tracking transactions done on-line Difficulty of tracking transactions done on-line Possibility of classification error specially when business of transactors are unknown to reporting banks Possibility of classification error specially when business of transactors are unknown to reporting banks Difficulty of separating transactions involving several types of service rendered Difficulty of separating transactions involving several types of service rendered COMPILATION ISSUES in the SERVICES ACCOUNT

21 l Inclusion of some pertinent foreign affiliate trade in services data based on the FDI Survey launched by BSP in 2005 l Addition of Financial Statements as data source in 2007 data source in 2007 l Adoption of Surveys on IT Enabled Services starting 2008 Services starting 2008 CURRENT DEVELOPMENT

22 l Expansion of the coverage of Cross Border Transaction Survey is being considered to include, among others, major transactions in services. l Coordination with other government agencies to institutionalize surveys on emerging services accounts like health and wellness. FUTURE DIRECTIONS

23 l Strengthen capacity building by asking technical assistance on the topics: how to design and conduct enterprise surveys for generating ITS statistics; and data model for calculation of proxy. l Prioritize areas/sectors that needs improvement for the SITS. l Development of methodology to account for under coverage of ITS accounts. RECOMMENDATIONS

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