1 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD Measuring Gross Regional Domestic Product: The Philippine Experience by MARIA FE M. TALENTO Division Head Production Accounts Division National Statistical Coordination Board International Workshop Regional Products and Income Accounts Tiantan Hotel, Beijing China March, 2010

2 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD I.Introduction II.Compilation Process: Gross Regional Domestic Product (GRDP) of the Philippines III.Sources of Data IV.Estimation Methodology V.Development Efforts VI.Issues on the GRDP VII.Current Improvements VIII.Next Steps OUTLINE OF PRESENTATION

3 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD I. INTRODUCTION  The Philippine Statistical System (PSS)  A highly decentralized statistical system: - statistics are produced by a number of major producers of primary data and by smaller units in all levels of government which generates statistics as a by-product of their administrative or regulatory functions

4 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD I. INTRODUCTION  The Current Gross Regional Domestic Product (GRDP)  follows the 1968 UNSNA but to a limited extent already incorporates the recommendations of the 1993 SNA. )  a Designated Statistics under Executive Order No. 352 and is currently being developed and maintained by the National Statistical Coordination Board (NSCB)

5 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD I. INTRODUCTION  Milestones in GRDP estimation:  1974 – first compilation of the GRDP for the period  1978 – GRDP compilation was resumed and institutionalized  Data Series of GRDP:  Coverage of GRDP:  17 regions  Date of Release of GRDP:  Every first Thursday of August of the current year

6 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD II. COMPILATION PROCESS  The current GRDP is compiled by industrial origin: 1. Agriculture, Fishery and Forestry a)Agriculture b)Forestry 2.Industry a)Mining and Quarrying b)Manufacturing c)Construction d)Electricity and Water

7 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD II. COMPILATION PROCESS  The current GRDP is compiled by industrial origin: 3. Services a)Wholesale and Retail Trade b)Transportation, Communication and Storage (TCS) c)Finance d)Ownership of Dwellings and Real Estate (ODRE) e)Private Services f)Government Services

8 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD II. COMPILATION PROCESS  GRDP Measurement : uses the production approach: - Unduplicated sum of all the goods and services produced in the regional economy (by resident producers), valued at producers’ prices GRDP (P) =  Gross Value Added (GVA) by industry, by region

9 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD II. COMPILATION PROCESS  Top to Bottom Approach: - National control total by sector is allocated by region - data support is stronger at the national level

10 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD II. COMPILATION PROCESS  The NSCB is in the process of devolving the estimation of the GRDP to the NSCB Regional Offices: - the NSCB Central Office estimates the GRDP by sector for all 17 regions using the national level as control total. - Simultaneously, the 9 NSCB regional offices come up with an independent estimate of their region’s GDP by sector using available data and indicators from their respective regions

11 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD II. COMPILATION PROCESS  Estimates of the Central Office and the NSCB Regions go through a deliberation process by sector by region (validation of data, major developments in the region, etc.)  The final estimates are reached, in consensus with the NSCB Regions after incorporating all considerations in the deliberation process.  Independent estimates from the regions, however, will not add up to the national total  National total by sector is allocated to the Regions using percentage distribution.

12 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD III. SOURCES OF DATA  Census/Survey-based data - Census of Phil. Business & Industry (CPBI) - Annual Survey of Phil. Business & Industry (ASPBI) - Quarterly Survey of Phil Business & Industry (QSPBI)  Administrative-based data  Special Studies  Indicators from Industry Associations (i.e., Chamber of Mines, Cement Manufacturers Assn. of the Philippines, etc.)

13 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD   Indirect Approach: Use of GVARs GVA = Gross Output * Gross Value Added Ratio (GVAR) where: GVAR = Gross Value Added Gross Output  Sectors: Agriculture, Fishery and Forestry, Mining and Quarrying IV. Current Price Estimation: by region

14 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD   Value Extrapolation GVA t = previous GVA level t-1 * growth rate of the value of production t /t-1  Example: Services sectors – value extrapolation using the trend of gross revenue from the Quarterly Survey of Phil Business and Industry (QSPBI) IV. Current Price Estimation: by region

15 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD   Uses the fixed-base year method:  Single Deflation: GVA k = GVA t /Deflator  Quantity Revaluation: GVA k = (Qty t * Price at base year)*GVAR  Volume Extrapolation: GVA k = GVA level t-1 * 1+ GR rate of volume or output indicator /t-1 IV. Constant Price Estimation: by region

16 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD V. DEVELOPMENT EFFORTS  Addressing increasing demand for local level statistics:  pilot compilation of the Provincial Product Accounts for the provinces of Palawan in 1998 and Guimaras in 2006

17 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD V. DEVELOPMENT EFFORTS  ADVANCE RELEASE CALENDAR: NSCB has adopted a policy of releasing in advance the schedule of press releases for the national accounts & its related accounts including the GRDP  Forging of partnerships with source agencies - bilateral meetings, Task Forces

18 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD V. DEVELOPMENT EFFORTS  S upplementary data from the private sector: - financial statement of companies - gross revenue of top food chains - volume and value of utilities - Indicators from industry associations  I ncorporated emerging industries such as the Business Process Outsourcing (BPO) in GRDP beginning 2003

19 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD V. DEVELOPMENT EFFORTS  Use of NSCB website to inform the public:  Press Releases, Announcements on the GRDP  Technical Notes on the GRDP  Metadata on the GRDP  Advance Release Calendar on National Accounts and its Related Accounts  Regional Fact Sheets  Response to erroneous GRDP reports from the media

20 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VI. ISSUES  Data Problems  Data support at the regional level  Frequent revision of regional compositions  Time lag of data sources Survey/Census results, Price indices, etc.  Need to update/improve parameters Ratios used in estimation i.e., GVAR, undercoverage ratios

21 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VI. ISSUES  Coverage  Emerging Industries  Births and deaths of establishments  Undercoverage of illegal activities  Undercoverage of own-account production

22 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VI. ISSUES  Some Measurement Problems  Regional allocation of output -Economic activities such as Fishing, Transportation and Communication industries which extend beyond regional boundaries -Problem of allocating the cost of operations of the head office for companies with regional branches  Regional estimates of the informal sector

23 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VI. ISSUES  RESOURCES  Manpower - fast turnover of national accounts staff in the central office - need for training on National Accounts for NSCB personnel in the Regions - need for the NSCB Central Office staff to revive visits to the regions for validation of estimates

24 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VI. ISSUES  RESOURCES  Software for GRDP Compilation: -need to upgrade current hardware and software resources - - need to refine the existing computerized GRDP compilation  Financial Resources for statistical activities: limited budget given to censuses and surveys; Statistical offices always get low priority in the allocation of resources

25 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VII. CURRENT IMPROVEMENTS  Over-all Revision/Rebasing of the GRDP  Revised/rebased series  Implementation of 1993 SNA Concepts  Shift in base year to 2000 & eventually 2006  Improvement in Data and Methodology  Refinements in the computerized compilation of the GRDP  Date of Release: September 2010

26 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD VIII. NEXT STEPS  Compilation of City/Provincial Product Accounts  Provision of training to Compilers and Data Producers  Policy on Overall Revision/Rebasing of the GRDP

27 Int’l Workshop Regional Products and Income Accounts Maria Fe M. Talento March 2010 Republic of the Philippines NATIONAL STATISTICAL COORDINATION BOARD Maraming Salamat Po! URL: