presented by raymundo j. talento director, economic statistics office

NATIONAL STATISTICAL COORDINATION BOARD

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

Presented byRaymundo J. Talento

Director, Economic Statistics OfficeNational Statistical Coordination Board

International Workshop on household Income, Consumption and Full Accounting of the Household

Sector

Beijing, China 26-28 March 2012

ESTIMATION OF THE HOUSEHOLD SECTOR

(Philippine Case)



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Outline of the Prensentation

I. Introduction

II. Scope and Coverage

III. Data Sources

IV. Estimation Methodology

V. Issues/concerns



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Measurement of GDP

Three approaches in GDP Measurement

1.Production Approach, GDP (P)

2. Expenditure Approach, GDP (E)

3. Income Approach, GDP (I)

I. Introduction



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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

Measurement of GDP cont’n…

Formula: GDP (P) = GVAwhere:GVA = Gross Value Added

= Gross Output Less Intermediate Inputs

I. Introduction



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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 – Mwhere:

HFCE = Household Final Consumption Expenditure

GFCE = Government Final Consumption Expenditure

GDCF = Gross Domestic Capital FormationX = ExportsM = Imports

I. Introduction



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Sum of primary incomes distributed by resident producer units


Formula: GDP (I) = CE + D + T – S + OS

where:CE = Compensation of EmployeesD = DepreciationT = Taxes (products/production)S = SubsidiesOS = Operating Surplus

I. Introduction



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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.


I. Introduction



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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

Measurement of GNI (GNP)

Formula: GNP = GDP + NPIAwhere:

GDP = Gross Domestic Product NPIA = Net Primary Income From

Abroad

I. I. Introduction



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THUS,

THE PSNA GENERATES

PRODUCTION, EXPENDITURES AND INCOME ESTIMATES

I. Introduction



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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):




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HFCE – classified according to purpose

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




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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




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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)

III. Data Sources



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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.

IV. Methodology



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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.

IV. Methodology



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SHOULD THE INCOME AND EXPENDITURES DATA OF THE PSNA AND THE FIES

BE

“CONSISTENT”?

“RECONCILED”?

V. Issues & Concerns



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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 incidenceUsed for analyzing income distributionUsed as an indicator for NA purposes

What is the FIES?




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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)



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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.



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Therefore, if one must “compare” income data from the PSNA and the FIES, the closest one may look for comparability is

THE HOUSEHOLD SECTOR!



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IS

FIES INCOME = PSNA INCOME OF THE HOUSEHOLD SECTOR?




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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)




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FIES INCOME INCLUDES:


Salaries and wages from employment Net share of crops, fruits and vegetables produced or livestock and poultry raised by other householdsCash 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



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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



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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




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SOURCES OF DIFFERENCES

1. COVERAGE

2. CONCEPTUAL/DEFINITION OF INCOME

3. METHODOLOGICAL ( NOS OF HHS)

4. DATA-RELATED



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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 EnterprisesIndividual Households Individual HouseholdsInstitutional HouseholdsNon-profit Institution Serving Household




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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:

NAcovers 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




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In terms of TYPE OF INCOME covered:

FIESIncludes income defined in the NIA but excludes items on depreciation and indirect taxes or subsidies




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In terms of METHODOLOGY :

PSNANet Operating Surplus of Households is residually calculated

FIESTotal Income from Entrepreneurial Activities




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In terms of DATA-RELATED DIFFERENCES :

FIESHH response based on recall -underreporting/overreporting of income/expendituresPSNAData comes from different sources and estimates are validated through the SUT




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Thank You!Thank [email protected]@nscb.gov.ph

presented by raymundo j. talento director, economic statistics office

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