Practice - Philippines

ESTIMATION OF THE HOUSEHOLD
SECTOR
(Philippine Case)
Presented by
Raymundo J. Talento
Director, Economic Statistics Office
National Statistical Coordination Board
International Workshop on household Income, Consumption and Full

Accounting of the Household Sector
Beijing, China 26-28 March 2012
International Workshop on Household Income, Consumption & Full Accounting of the

Household Sector , Beijing, China NATIONAL STATISTICAL COORDINATION
RJ Talento /26-28 March 2012 BOARD
Outline of the Prensentation
I. Introduction
II. Scope and Coverage
III. Data Sources
IV. Estimation Methodology
V. Issues/concerns

2 BOARD
RJ Talento /26-28 March 2012
I. Introduction
Measurement of GDP
Three approaches in GDP Measurement
1.Production Approach, GDP (P)
2. Expenditure Approach, GDP (E)
3. Income Approach, GDP (I)

3 BOARD
I. Introduction
Measurement of GDP cont’n…
1. Production Approach, GDP (P)
Unduplicated sum of all the goods and

services produced in the domestic economy (by
resident producers)
Measurement of GDP by industrial origin
Formula: GDP (P) =  GVA
where:
GVA = Gross Value Added
= Gross Output Less Intermediate
Inputs
4 BOARD
I. Introduction

2. Expenditure Approach, GDP (E)
Sum of the final uses of goods and services (all
except intermediate consumption) measured at
purchaser’s prices, less the value of imports of
goods and services
Formula: GDP (E) = HFCE + GFCE+ GDCF + X – M
where:
HFCE = Household Final Consumption
Expenditure
GFCE = Government Final Consumption
Expenditure
GDCF = Gross Domestic Capital Formation
X = Exports
International Workshop on HouseholdM = Imports
Income, Consumption & Full Accounting of the
5 BOARD
I. Introduction

Sum of primary incomes distributed by
resident producer units
Formula: GDP (I) = CE + D + T – S + OS
where:
CE = Compensation of Employees
D = Depreciation
T = Taxes (products/production)
S = Subsidies
OS = Operating Surplus
6 BOARD
I. Introduction

By institutional units. In the present PSNA these are
:
 Non-Financial
 Financial
 Government; and
 Households and unincorporated enterprises, including
non-profit institutions serving households
 Also the Rest of the World (ROW) – viewed as the
grouping of all non-resident units.
7 BOARD
I. I. Introduction
Measurement of GNI (GNP)

Gross National Income (GNI)
Covers (Income from) Production

within the domestic territory (GDP),
including production from the rest of the
world (NFIA) provided by residents of the
Philippines
Formula: GNP = GDP + NPIA
where:
GDP = Gross Domestic Product
NPIA = Net Primary Income From
Abroad
8 BOARD
I. Introduction
 THUS,
THE PSNA GENERATES
PRODUCTION, EXPENDITURES AND INCOME

ESTIMATES

9 BOARD
HFCE consists of actual and imputed

expenditures of households for the purpose of
acquiring individual consumption of goods &
services.
Includes:
- Individual and institutional households (HHs)
- Non-profit institutions serving households
(NPISH):

10 BOARD
HFCE – classified according to purpose

- based on the Classification of
Individual Consumption according to Purpose
(COICOP) as recommended by the 2008 SNA

11 BOARD
HFCE – includes:
1. Food and Non-alcoholic Beverages
2. Alcoholic Beverages and Tobacco
3. Clothing and Footwear
4. Housing, Water, Electricity, Gas and Other Fuels
5. Furnishings, Household Equipment and Routine
Household Maintenance
6. Health
7. Transport
8. Communication
9. Recreation and Culture
10. Education
11. Restaurants and Hotels
12. Miscellaneous Goods and Services
12 BOARD
III. Data Sources
Data/information used :
- Family Income and Expenditures Survey (FIES)
of NSO
- Consumer Price Index (CPI) of NSO
- 2000 Input-Output (I-O) Table of NSCB
- Total output of industry sectors from the
estimates of the National Accounts of the NSCB
- Foreign Trade Statistics (FTS) of NSO
- Administrative-based data of various agencies
(i.e. volume & value of removals for cigars,
cigarettes & alcoholic drinks from the BIR)
13 BOARD
IV. Methodology
2000 Benchmark Year

- adopted as initial estimate the 2000 I-O
estimates of HFCE, with each HFCE I-O
code/description classified according to
COICOP.

14 BOARD
IV. Methodology
Non-benchmark Year (1998-1999, 2001-2010)

- the 2000 benchmark estimate of HFCE by
sub-component was extrapolated using the
trend of the gross output of related industry
sector
- estimates are reconciled with the other
sectors through the supply and use table
- it is further validated using the expenditure
structure derived from the FIES.

15 BOARD
V. Issues & Concerns
 SHOULD THE INCOME AND EXPENDITURES

DATA OF THE PSNA AND THE FIES
BE
“CONSISTENT”?
“RECONCILED”?

16 BOARD
What is the FIES?
is a household survey being conducted by the
NSO every three years
Provides data on family income and

expenditures which include among others levels
of consumption by item of expenditure as well
sources of income in cash and in kind
Source of weights for the CPI

Used for computing poverty incidence
Used for analyzing income distribution
Used as an indicator for NA purposes
17 BOARD
The FIES does not collect

income/expenditures data from
 Non-Financial Institution
 Financial Institution
 Government
 Non-profit institutions serving
households
 Rest of the World (ROW)

18 BOARD
In the PSNA, the Transactors (Institutional

Sectors) of the Economy are:
 Non-Financial Institution
 Financial Institution
 Government; and
 Households and unincorporated
enterprises, including non-profit
institutions serving households
 Also Rest of the World (ROW) – the
grouping of all non-resident units.

19 BOARD
 Therefore, if one must “compare” income

data from the PSNA and the FIES, the
closest one may look for comparability is
THE HOUSEHOLD SECTOR!

20 BOARD
IS
FIES INCOME = PSNA INCOME OF THE
HOUSEHOLD SECTOR?

21 BOARD
FIES INCOME REFERS TO INCOME IN CASH

AND IN KIND RECEIVED BY THE HH’s
FIES INCOME INCLUDES (FIES
QUESTIONNAIRE):
PART III: INCOME AND OTHER RECEIPTS
PART IV: ENTREPRENEURIAL ACTIVITIES
PART II: EXPENDITURE AND OTHER
DISBURSEMENTS ( RECEIVED AS GIFTS)

22 BOARD
FIES INCOME INCLUDES:

Salaries and wages from employment
Net share of crops, fruits and vegetables
produced or livestock and poultry raised by
other households
Cash receipts, gifts, support, relief and other
forms of assistance from abroad
Cash receipts, support, assistance and relief
from domestic source
Rentals received from non-agricultural lands,
buildings, spaces and other properties
Interest
23 BOARD
FIES INCOME INCLUDES cont’n:

Pension and retirement, workmen’s
compensation and social security benefits
Dividends from investment
Other sources of income not elsewhere
classified
Family Sustenance Activities
Total Income from Entrepreneurial Activities
Goods and Services Received as gift
Imputed Rental Value of Owner-Occupied
Dwelling Units

24 BOARD
 PSNA HH INCOME ALSO BASICALLY

REFERS TO INCOME IN CASH AND IN KIND
RECEIVED BY THE HOUSEHOLD SECTOR
 PSNA HH INCOME =
COMPENSATION +
OPERATING SURPLUS +
PROPERTY INCOME +
TRANSFERS

25 BOARD
SOURCES OF DIFFERENCES
1. COVERAGE
2. CONCEPTUAL/DEFINITION OF INCOME
3. METHODOLOGICAL ( NOS OF HHS)
4. DATA-RELATED

26 BOARD
Differences between the national accounts of

the NSCB and the income data from the FIES
of the NSO.
In terms of COVERAGE:
PSNA FIES
Household & Unincorporated Enterprises Household & Unincorporated Enterprises

Individual Households Individual Households
Institutional Households
Non-profit Institution Serving Household

27 BOARD
Differences between the national income

accounts of the NSCB and the income data
from the FIES of the NSO.
In terms of TYPE OF INCOME covered:
NA
covers income of household derived from
engaging in unincorporated enterprises,
compensation of employee, property income
from investments of assets, depreciation from
the use of assets, transfers, taxes, subsidies

28 BOARD

In terms of TYPE OF INCOME covered:
FIES
Includes income defined in the NIA but
excludes items on depreciation and indirect
taxes or subsidies

29 BOARD

In terms of METHODOLOGY :
PSNA
Net Operating Surplus of Households is
residually calculated
FIES
Total Income from Entrepreneurial Activities

30 BOARD

In terms of DATA-RELATED DIFFERENCES :
FIES
HH response based on recall
-underreporting/overreporting of
income/expenditures
PSNA
Data comes from different sources and
estimates are validated through the SUT

31 BOARD
Thank You!
www.nscb.gov.ph
info@nscb.gov.ph

32 BOARD

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ESTIMATION OF THE HOUSEHOLD

International Workshop on household Income, Consumption and Full

International Workshop on Household Income, Consumption & Full Accounting of the

International Workshop on Household Income, Consumption & Full Accounting of the

Three approaches in GDP Measurement

1.Production Approach, GDP (P)

2. Expenditure Approach, GDP (E)

3. Income Approach, GDP (I)

International Workshop on Household Income, Consumption & Full Accounting of the

Measurement of GDP cont’n…

1. Production Approach, GDP (P)

Unduplicated sum of all the goods and

Measurement of GDP cont’n…

Measurement of GDP cont’n…

Measurement of GDP cont’n…

Measurement of GNI (GNP)

Covers (Income from) Production

THE PSNA GENERATES

PRODUCTION, EXPENDITURES AND INCOME

International Workshop on Household Income, Consumption & Full Accounting of the

HFCE consists of actual and imputed

International Workshop on Household Income, Consumption & Full Accounting of the

HFCE – classified according to purpose

International Workshop on Household Income, Consumption & Full Accounting of the

2000 Benchmark Year

International Workshop on Household Income, Consumption & Full Accounting of the

Non-benchmark Year (1998-1999, 2001-2010)

International Workshop on Household Income, Consumption & Full Accounting of the

 SHOULD THE INCOME AND EXPENDITURES

International Workshop on Household Income, Consumption & Full Accounting of the

Provides data on family income and

Source of weights for the CPI

The FIES does not collect

International Workshop on Household Income, Consumption & Full Accounting of the

In the PSNA, the Transactors (Institutional

International Workshop on Household Income, Consumption & Full Accounting of the

 Therefore, if one must “compare” income

THE HOUSEHOLD SECTOR!

International Workshop on Household Income, Consumption & Full Accounting of the

International Workshop on Household Income, Consumption & Full Accounting of the

FIES INCOME REFERS TO INCOME IN CASH

International Workshop on Household Income, Consumption & Full Accounting of the

FIES INCOME INCLUDES:

FIES INCOME INCLUDES cont’n:

International Workshop on Household Income, Consumption & Full Accounting of the

 PSNA HH INCOME ALSO BASICALLY

International Workshop on Household Income, Consumption & Full Accounting of the

International Workshop on Household Income, Consumption & Full Accounting of the

Differences between the national accounts of

Household & Unincorporated Enterprises Household & Unincorporated Enterprises

International Workshop on Household Income, Consumption & Full Accounting of the

Differences between the national income

International Workshop on Household Income, Consumption & Full Accounting of the

Differences between the national income

International Workshop on Household Income, Consumption & Full Accounting of the

Differences between the national income

International Workshop on Household Income, Consumption & Full Accounting of the

Differences between the national income

International Workshop on Household Income, Consumption & Full Accounting of the

International Workshop on Household Income, Consumption & Full Accounting of the

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