STATISTICS DEPARTMENT ES TRANSITION FROM THE ITRS TO THE NEW ITS SURVEY FOR THE COLLECTION OF OTHER SERVICES BOP DATA: LAST DEVELOPMENTS AND FUTURE CHALLENGES Mª Teresa García Cid Methodology and New Information Sources Unit Manager OECD-Eurostat Meeting of Experts in Trade in Services Statistics (TIS) Paris, September 2007

STATISTICS DEPARTMENT 2 GUIDELINES Background:  deciding on the alternative system to the ITRS  implementation of the project on the new ITS survey  main features of the ITS survey Current stage:  assessment of the suitability of the new data collection system  results of the analysis of ITS survey data  methodological improvements Near future challenges:  geographical breakdown  monthly estimates  revision of methodological standards

STATISTICS DEPARTMENT 3 DECIDING ON THE ALTERNATIVE SYSTEM TO THE ITRS When deciding on the new BOP data collection system two options were considered:  General Direct Reporting System versus Sub-Systems System How to make the decision?  Quantitative analysis of BOP reporters from a double point of view, static (structure and concentration) and dynamic (stability) Main results:  high concentration of the BOP population (coverage 90% = 16.5% total population)  the relevant population is unstable (57% of the total population operate only one year)  only a few “Big players” declare operations related with other BOP items Main conclusions:  a system of subsystems seems to be a better choice than a GDRS  a survey seems to be the best way to compile Other Services information for BOP  it was necessary to create a specific business register which should be updated periodically Why maintaining ITRS is interesting for the purpose of the ITS survey?  to update the population for the survey  for checking the suitability of the new data  to estimate monthly data

STATISTICS DEPARTMENT 4 IMPLEMENTATION OF THE PROJECT ON THE NEW ITS SURVEY Inter-institutional Cooperation:  cooperation agreement with the National Statistics Institute (INE)  two-tier working group (High level – making decisions, Technical group – giving information and implementing) Object:  designing and implementing a new information system for the estimation of the Other Services item of the BOP, mainly based on surveys to enterprises Responsibilities:  BE + INE: elaboration of the grossing up framework (business register), sample design and designing of the questionnaires (BOP methodological requirements)  INE: field work and grossing up  BE + INE: analysis of macro (by item)/micro level data (BOP and ITS)  BE: ITS data + others sources to produce and disseminate the final data in the BOP framework Timetable:  2002: analysis of the target population  : design and launch of the pilot exercise (monthly character, detailed breakdown)  2005: obligatory by law, two quarterly questionnaires (detailed / simplified)  : analysis of ITS data  2008: dissemination of BOP data with the new system

STATISTICS DEPARTMENT 5 MAIN FEATURES OF THE ITS SURVEY Sub-populations (SP) and statistical frames (F):  SP1 Register of enterprises trading in services with non residents (BE) F1 stable enterprises coming from SP1  SP2 Large enterprises’ (turnover >6.01 € mll) VAT Returns (Treasury) F2.1 large enterprises’ VAT returns on international transactions F2.2 large enterprises’ VAT returns on domestic transactions  SP3 Central Business Register (INE) F3 Central Business register except enterprises with NACE in sections A (agriculture), B (Fishing), L (Public Administration, Defence and Social Security), P (Households employing personnel) and Q (Extraterritorial bodies), and enterprises with fewer than 10 employees Sampling procedure:  stratified random sampling procedure with equal probability of selection  stratification variables are principal economic activity (NACE) and enterprise size (number of employees) Questionnaires:  identification data, activity, number of employees  detailed questionnaire: 51 items and individual country  simplified questionnaire: 10 items and % of three main counterpart countries

STATISTICS DEPARTMENT 6 WORK IN PROGRESS: ASSESING THE SUITABILITY OF THE NEW DATA COLLECTION SYSTEM At the current stage, main goal consist of the valuation of the suitability of the new data collection system for BOP purposes and of identifying/implementing possible methodological improvements INE+BE:  comparison BOP-ITS  top down approach: from the aggregated items to data by individual reporter  no geographical breakdown is considered for the time being INE sends BE:  ITS quarterly data  detailed breakdown by item (51) and by country  Q + 70 days aprox.  availability of ITS quarterly data from 2005Q1 to 2007Q1 BE sends INE:  quarterly data on foreign receipts and payments declared as being OS related  information by aggregated item (10) and by individual reporter  Q + 45 days aprox. INE: implementation of the methodological improvements derived from the analysis of the data

STATISTICS DEPARTMENT 7 COMPARISON BOP-ITS SURVEY (I): PREVIOUS CONSIDERATIONS When comparing BOP-ITS data it should be have in mind…  Different period allocation:  time criteria used by reporters (payments vs. accountancy statements)  schedule for the revision of data declared  Adjustments currently incorporated to BOP figures not necessary in the case of ITS source:  estimation of transactions below the declaration threshold  grossing of net foreign receipts and payments declared (though it may happen that ITS includes also net figures, this point should be investigated)  Complex BOP methodological requirements not fulfilled by reporters that lead to adjustments currently incorporated to BOP figures that should also be applied to the new data:  freights (f.o.b. valuation of merchandise exports and imports)  insurance (valuation of insurance services according to the service charge included in total premiums rather than by total premiums) These will affect…  period to be considered  disseminated estimates vs. directly reported data  revision of current BOP methodological adjustments

STATISTICS DEPARTMENT 8 COMPARISON BOP-ITS SURVEY (II): AGGREGATED DATA Insurance services are not comparable due to the netting of premiums and claims in ITS reported figures. Main features:  ITS < BOP, both in exports (ITS/BOP = 67,6%) and imports (ITS/BOP = 60,3%)  ITS series, both exports and imports, reflect a volatility slightly above BOP series  BOP shows an increasing trend all through the period (with the exception of 07Q1 in the case of exports), ITS pattern is not so clear and it is similar in both exports and imports  in net terms, until 06Q2 BOP deficit-ITS surplus, from 06Q3 onwards ITS evolution turns to BOP patterns Chart 1 Chart 2 Chart 3

STATISTICS DEPARTMENT 9 COMPARISON BOP-ITS SURVEY (III): STRUCTURE AND COVERAGE BY COMPONENT FOR THE EXPORTS  Regarding exports structure, stands out the loose of weight of Other business services component, gaining in importance in a significant manner Transportation and Computer and information services items.  In general terms, ITS data are lower than BOP data, being remarkable the low coverage of Other business services. Only for Computer and information services and Communication services ITS data are higher than BOP data. EXPORTS PERCENTAGE STRUCTURE 2006 COVERAGE ITS SURVEY/BOP BOP ITS SURVEY Q1 OTHER BUSINESS SERVICES40%9%13%37% TRANSPORTATION34%49%90%92% COMPUTER AND INFORMATION SERVICES7%18%149%122% FINANCIAL SERVICES7%8%70%55% CONSTRUCTION SERVICES4% 57%67% COMMUNICATION SERVICES3%7%158%147% PERSONAL, CULTURAL AND RECREATIONAL S.2% 59%57% ROYALTIES AND LICENCE FEES2% 85%119% GOVERNMENT SERVICES1%0%16%10% TOTAL OTHER SERVICES (EXCLUDING INSURANCE S.)61%68% Source: Banco de España Table 1

STATISTICS DEPARTMENT 10 COMPARISON BOP-ITS SURVEY (IV): STRUCTURE AND COVERAGE BY COMPONENT FOR THE IMPORTS  In the case of imports, it is also significant the loose of weight of Other business services component. Unlike exports, Royalties and license fees new percentages are relevant.  For the imports ITS coverage of BOP data is lower than for the exports (55% in 2006 opposite to a 61% of the exports). Here again it is worthy to highlight the low figures for Other business services data. For Royalties and license fees and Computer and information services ITS data are higher that BOP data. IMPORTS PERCENTAGE STRUCTURE 2006 COVERAGE ITS SURVEY/BOP BOP ITS SURVEY Q1 OTHER BUSINESS SERVICES41% 25% 33%37% TRANSPORTATION34% 36% 58%88% FINANCIAL SERVICES7% 5% 37%29% ROYALTIES AND LICENCE FEES4% 15% 203%227% COMMUNICATION SERVICES4% 7% 96%86% COMPUTER AND INFORMATION SERVICES4% 8% 132%112% PERSONAL, CULTURAL AND RECREATIONAL S.3% 1% 16%17% CONSTRUCTION SERVICES2% 52%68% GOVERNMENT SERVICES1% 85%97% TOTAL OTHER SERVICES (EXCLUDING INSURANCE S.)55%65% Source: Banco de España Table 2

STATISTICS DEPARTMENT 11 COMPARISON BOP-ITS SURVEY (V): MAIN DIFFICULTIES Main limitations identified so far…  Netting/grouping of some transactions in the simplified questionnaire  insurance services  construction abroad / construction in the compiling economy  Tabulating variables (BOP item and country) do not coincide with strata definition variables (activity and size)  non response imputation procedures  Non response of resident branches-affiliates of foreign companies  air transport passenger services  High volatility of imports data by individual reporter  identification and treatment of outliers  Different practices in the reporting by companies belonging to the same group  Declaration of only exports or imports related to the main activity of the company  Confusions in the allocation of transactions among the different items

STATISTICS DEPARTMENT 12 COMPARISON BOP-ITS SURVEY (VI): SOLUTIONS Main solutions adopted…  Changes in the questionnaires:  insurance services (gross premiums and claims)  construction services (abroad - in the compiling)  Modifications in the sample design:  air transport passenger services: a) increase of the coverage of companies classified as NACE (Activities of travel agencies and tour operators/ tourist assistance activities), b) ensure that all companies are addressed the detailed questionnaire  inclusion of new reporters belonging to the same company group  correction of grossing up coefficients for some reporters identified as being relevant in BOP data  Improvements in non response imputation procedures:  according to a) historical information on the same reporter, and b) evolution rate of exports/imports by item (instead of total)  Close contact with reporters  meetings  methodological notes

STATISTICS DEPARTMENT 13 NEAR FUTURE CHALLENGES  Analysis of ITS data geographical breakdown (Regulation EC 184/2005)  BOP EUR: Extra EU  BOP Q: Level 1  BOP ITS: Level 2  Definition of monthly BOP estimates  identification of complementary sources to the ITS  estimation of an econometric model based on BOP historical information  estimation of the monthly distribution of quarterly ITS data  Revision of the questionnaires in accordance with the revision of the methodological manuals  repairs on goods are shown under services  processing fees on goods not owned by the processor are shown as a service in all cases  postal and courier services are included in transport  telecommunication, computer and information grouping  results of research and development are treated as produced assets and included in services (previously shown in the capital account)

STATISTICS DEPARTMENT THANK YOU FOR YOUR ATTENTION Mª TERESA GARCIA-CID