D2,2.philippines country practices

NATIONAL STATISTICAL COORDINATION BOARDInternational Workshop on Regional Products and Income Accounts, Beijing, ChinaVRIlarina/ March 15-17 2010

MEASURING THE GROSS REGIONAL EXPENDITURES

(GRDE) IN THE PHILIPPINES

by

VIVIAN R. ILARINANational Statistical Coordination Board

Philippines

International Workshop on Regional Products and Income Accounts

Beijing China, 15-17 March 2010


I. Introduction

a. Brief History

b. Salient Features of the Present GRDE

c. Compilation Process

II. The Gross Regional Domestic Expenditures

a. Scope and Coverage

b. Sources of Data

c. Estimation Methodology

d. Measurement Issues

III. Way Forward

Outline of the Presentation


A. Brief History

The Philippine System of National Accounts (PSNA)

• The has been continuously compiled for almost 63 years now which started in 1947 – for the

annual national accounts and in 1983 for the quarterly

national accounts;

• The National Statistical Coordination Board (NSCB) which

is task with the compilation of the PSNA has started

development of the GRDE in 1987 – much later after

the start of the GRDP in 1971;

I. Introduction


• 1987 is also a milestone in the PSNA as this starts the

regular publication of the GRDE on an annual basis;

• The first release of the GRDE was at base year 1972

and an overall revision / rebasing of the GRDE was undertaken in 1990 with the shift of the

base year to 1985 and improved estimates.


B. Salient Features of the Present GRDE

• The GRDE is intended to complement the current series of the GRDP to be able to provide

measures of the regional economy at the production and expenditure sides of the national accounts;

• While the compilation of the GRDE started in 1987, this is

still in its developmental stage since the NSCB is constantly improving the GRDE by coordinating

with various agencies for the improvement of data

support for this set of accounts;


• The present GRDE is at base year 1985; still

follows the recommendations of the 1968 UNSNA;

• The 2009 GRDE publication is covering the period 2006,

2007 and 2008;

• The GRDE has a lag time of one year – that is, data

becomes available in the publication after one year;

• The GRDE release is first week August of each current

year.


C. Compilation Process of GRDE

1. The GRDE starts from the national level

estimates.

GDP at the expenditure side is compiled as : 1. Personal Consumption Expenditures (PCE)

Plus 2. Government Consumption Expenditures (GCE)Plus 3. Gross Domestic Capital Formation (GDCF)

a. Fixed Capital a.1. Construction a.2. Durable Equipment a.3. Breeding Stocks b. Changes in Stocks

Plus 4. Exports a. Merchandize Exports b. Non-Merchandize Exports

Plus 5. Imports a. Merchandize Imports b. Non-Merchandize Imports

EQUALS EXPENDITURES ON GROSS DOMESTIC PRODUCT


For the Gross Regional Domestic Expenditures, the

following are estimated separately by region namely:

1. Personal Consumption Expenditures (PCE) 2. Government Consumption Expenditures (GCE) 3. Construction 4. Durable Equipment 5. Breeding Stocks, Orchard Development &

Afforestation


The rest of the expenditure items below are estimated

as residual : 1. Exports 2. Imports and 3. Changes in Stocks

The residual estimates also includes the statistical discrepancy between the production and the

expenditure sides of GDP.

The GRDE starts with the national estimates as control total

and these are allocated among regions using appropriate

regional indicators.


THE COMPILATION OF THE GRDE

a. Scope and Coverage (operational)

b. Major sources of data

c. Estimation Methodology

d. Some Measurement Issues

II. The Gross Regional Domestic Expenditures (GRDE)


1.Personal Consumption Expenditures

a.Scope and Coverage: - includes the final consumption

expenditures of individual households, institutional

households, and private non-profits institutions

serving households.

b. Source of data: Family Income and Expenditure Survey (FIES) by region

which is conducted by the National Statistics

Office (for benchmark estimates)


PCE is classified by item of expenditures namely:

1. food 2. beverage

3. tobacco 4. clothing and footwear 5. fuel, light and water 6. household furnishings 7. household operations 8. transportation and communications 9. miscellaneous expenditures like

medical and health expenses, personal care, etc.


c. Estimation Methodology: Benchmark : Regional distribution of total

expenditures from Family Income and Expenditure Surveys (FIES) – serves as indicator to allocate national level estimates.

Annual: trend extrapolation of regional estimates resulting from modified commodity flow method

by region using indicators used on production

coming from the GRDP.


Deflator: Consumer Price Index by region(average of all items for each

region)

d. Measurement Issues:

The estimation of PCE at the regional level pose limitations for the replication of the methodology used at the national level because of the unavailable data for regional estimates.

It is assumed that the distribution of the final

expenditures of NPISH is the same as the household

expenditure distributions.


2. General Government Consumption Expenditures

a. Scope and Coverage: includes central (or national) government;

local government and social security agencies

b.Sources of data: a. For national and local govt - financial report from the Commission on Audit (COA) b. For social security agencies – financial report from the Social Security System (SSS) and the Government Service Insurance System (GSIS)


d.Estimation Methodology:

Regional for government consumption expenditures are coming from the Commission on Audit (COA).

When data are not available from COA, data on regional program of expenditures from the Department of Budget and Management (DBM) are used.

Deflator: Average Earnings Index – computed at national level is the same index used for all regions. CPI by region for maintenance and operating expenses.


3. Construction

a. Scope and Coverage:

Classified into public construction and private construction;

- Public construction - are construction done by national

government, local government, and government corporations;

- Private construction - are residential construction and

non-residential construction


b. Sources of data:

1. For public construction – annual financial reports from Commission on Audit; the Budget of Expenditures and Sources of Financing (BESF) of the Department of Budget

and Management (DBM)

2. For private construction – report on building permits compiled by the National Statistics

Office (NSO)


c. Estimation Methodology:

1. Regional public construction - Estimated only for physical accomplishment of contruction put in place;

2. Regional private construction – Estimates for residential and non-residential; used the

S-curve to estimate percentage distributionof physical accomplishments for the period.

Deflator: Regional CPI for housing and maintenance provides the regional differentials applied to

the composite price index at the national level.


d. Measurement Issues:

1. Regional allocation of the sector’s output among regions is based on indicator

of regional distribution as estimated from the

gross valued added of public and private construction;

2. Undercoverage for private construction which is based from building permits

is assumed to be uniform across regions because there is no data currently

available to estimate the undercoverage ratio by region.

3. For public, the national deflator used is used for all

regions.


4. Durable Equipment


-consists of outlays for new and used capital goods such as machinery and equipment acquired by all resident producers less sales or transfers of used capital goods;

- covers machinery specialized for particular industries,

general industrial machinery and equipment, transport

equipment and miscellaneous equipment.


b. Sources of data:

For imports of durable equipment – foreign trade statistics compiled by the National Statistics Office (NSO);

For domestic production – census and survey of establishments conducted by the National Statistics Office (NSO).



1. Regional indicators are obtained from the regional pattern of expenditure on equipment are resorted

which are generated from the establishment census

and surveys.

Deflator – the same deflator is used for national estimates and regional estimates which is the Wholesale Price Index.

2. This assumes that for most capital goods

price determination is more a function of the

uniqueness of the equipment rather than its

geographical placement.


d. Measurement Issue:

The commodity Flow Method as applied at the

national level estimate can not be used at the

regional estimates since available data for the

region can not fully support the methodology.


5. Breeding Stocks, Orchard Development and Afforestation a. Scope and Coverage: - Breeding Stocks: refer to outlays on livestock and

poultry raised as breeders, draught, milking, layers;

- Orchard Development: refers to outlays on the cultivation of plantations until they become productive;

- Afforestation : cultivation of forest trees in newly created forest areas.


b. Sources of data :

1. Bureau of Agricultural Statistics – for data

on inventory of livestock and poultry;

cost of production studies on total cost

per hectare for the development/main-

tenance of plantations;

2. National Statistics Office – from the Census

of Agriculture, data used are ratios of animals

used as capital formation and data on total

areas devoted to permanent crops.


c. Estimation Methodology Breeding Stocks

1. Estimates makes use of indicators on regional

data on inventory and regional prices used for breeding stocks, milking, laying and work animals.

2. The regional ratios to determine the number of animals used for capital formation are based on the Census of Agriculture.

Deflator - Regional farm gate prices for

each type of animals


Estimation Methodology:

Orchard Development a. Estimates makes use of indicators on

regional data on the distribution of value of

production of major plantation crops.

Measurement Issues:

a. Regional distribution follows the gross value

added by region.


Estimation Methodology

Afforestation a. Estimates makes use of indicators on

regional data on expenditures incurred by

private enterprises and government as

reported by the Forest Management Bureau

(FMB)

Deflator Regional cost per hectare reforested

translated into an index.


6. Changes in Stocks

- Stocks includes:

(a)(a) Materials & SuppliesMaterials & Supplies

(b)(b) Work-in-progress Work-in-progress

(c)(c) Finished Goods Finished Goods

(d)(d) Goods for Resale Goods for Resale



Changes in Stocks

Agriculture Non-Agriculture Government

• Rice

• Corn

• Sugar

• Crude

• Petroleum Products

• Trade

• Manufacturing /

Other Establishments

• National

• Local

• Gov’t Corporations


a. Bureau of Agricultural Statistics (BAS) - data on quarterly volume of production and inventory of rice and corn at the beginning of each

month, wholesale prices of rice and corn

b. Sugar Regulatory Board (SRA)- data on quarterly production, imports, exports, consumption and prices of sugar

c. Foreign Trade Statistics (FTS), NSO- Exports and Imports of Rice and Corn

d. Department of Energy (DOE)- monthly inventory and prices of crude and petroleum products

e. Commission on Audit (COA)- annual data on inventories of national, local government and government corporations

b. Sources of data :


1. Regional estimates are done separately for the agriculture and non-agriculture sectors.

2. Agriculture estimates used as regional indicators the stocksheld by households, commercial and National Food Authority

3. Non-agriculture estimates used as regional indicators the inventory held by industrial and non-industrial sectos particularly the finished goods held by manufacturing, mining and quarrying establishments.



Agricultural inventory – by farm gate prices

Non-agricultural inventory – by implicit price index at the national level and distributed into regions using as indicator the CPI.

Deflator

d. Measurement Issue:

a. As in the case of durable equipment, estimates of changes in stocks for non-agricultural industries use the establisment based data and household stocks are not adequately captured.


7. Exports and Imports

In the absence of regional trade flow, net exports is derived

as a residual item.

Hence, net exports refers to the combined effect of the

income flows between regions, the commodity flows between

regions and the rest of the world and the statistical discrepancy.


With the on-going Revision and Rebasing of the National

Accounts, the present GRDE is also undertaking the same

activities to consider the following for the release of the

new GRDE series from 1998 to 2009:

1. Base Year 20002. New Classification Systems –

- Philippine COICOP- Philippine PSCC

3. Adoption of the 1993 SNA concepts4. Use of update data and parameters

III. Way Forward


Thank you very much !

URL: http://www.nscb.gov.phe-mail: [email protected]

D2,2.philippines country practices

Documents

national statistics office

personal consumption expenditures

government consumption expenditures

agricultural statistics

measurement issues

national level

orchard development

national accounts