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A. Coverage of Indices

The quarterly indices on production, production per worker, gross revenue, employment, compensation, compensation per employee and average earnings are compiled for the following:

1. Production indices of agriculture, fishery and forestry, mining and quarrying as well as electricity and water.
2. Production per worker indices of mining and quarrying as well as electricity and water.
3. Gross revenue indices of manufacturing, wholesale and retail trade, transportation and communication, finance, real estate and private services.
4. Employment indices of mining and quarrying, manufacturing, electricity and water, wholesale and retail trade, transportation and communications, finance, real estate and private services.
5. Compensation indices of mining and quarrying, manufacturing, electricity and water, wholesale and retail trade, transportation and communications, finance, real estate as well as private services.
6. Compensation per employee indices of mining and quarrying, manufacturing, construction*, electricity and water, wholesale and retail trade, transportation and communications, finance, real estate as well as private services.

* This used to the average earning indices

The sectoral indices which are compiled using 1978 as base year, are based on the data from quarterly surveys and reports from various administrative and regulatory agencies. Although these quarterly data are available on a sectoral basis, some sectors do not have comprehensive coverage to allow the compilation of sectoral indices.
  

Thus, indices on production cover only three sectors (agriculture, mining and quarrying as well as electricity and water) while indices on gross revenue, employment and compensation cover most sectors of industry (except construction) and services. Indices on average earnings only cover the construction sector. Hence, the QEI publication contains selected indices for the agriculture, industry and service sectors and a summary of these indices (except production) for the industry (except construction) and services sectors.

As a matter of policy, revisions for the immediately preceding quarter may be done in each issue of this publication while revisions for the other quarters, if any, are made only during the Q1 round of estimates, which regularly comes out in July. For this issue, revisions were made on Q1-1999 for the employment and compensation indices of mining and quarrying; and Q1 1999 for the revenue index of manufacturing.

B. Estimation Methodology

1. Index on Volume of Production

The Laspeyre's method is used to estimate the index of production for the given quarter. This method represents the ratio of the current value of production to the total value of production during the base year period, expressed in percentage. The year 1978 is used as a base year which is equivalent to the constant weight adopted for the index estimation. The formula used is as follows:

The computed index for the specific aggregate sector is equivalent to the total value of production at current prices as a ratio to the total value of production at base year 1978. The aggregate sector refers to the summation of the values of the subsectors covered within the sector. For instance, the total value of the agriculture sector includes the value of agricultural crops, livestock, poultry and fishery.

2. Index on Production Per Worker

The index of production per worker is estimated by dividing the total value of production by the total number of workers for the sector. This is estimated at constant 1978 prices using the formula as follows:

At current prices, the estimate of the value of production is derived as a product of the current quantity of production and the current price per unit of production. At constant 1978 prices, the value of production is equal to the current quantity of production for the year multiplied by the 1978 price per unit of production.

The initial benchmark annual estimates were computed for the year 1978, using the available 1978 Census of Establishments (CE) as major data source for sectoral gross revenue, compensation and employment. These estimates were supplemented by available data from the National Accounts for sectoral gross value added as well as data from the 1978 Input-Output Industry Tables which provide the 1978 structure by sector.

For quarterly indices, the 1978 Quarterly Survey of Establishments (QSE) provided the basis for the quarterly breakdown of the annual levels. The corresponding indices for the quarter for each sector were equivalent to the ratio of the quarterly levels to the average quarterly values at base year 1978. For succeeding quarterly estimates, values were derived as the product of the relatives of the matched set of data from responding set of establishment for the sector which was based from the QSE and the corresponding values for the previous quarter. The formula used were as follows:

3.1 Index on Gross Revenue

3.2 Index on Compensation

3.3 Index on Employment

Total values for the aggregate sector were derived as the summation of the total value estimates of subsectors covered by the sector. The computed index for the sector is then derived as the ratio to the corresponding base year level aggregates.

The sectoral estimates at constant prices are computed by dividing the quarterly indices at current prices by the Consumer Price Index (CPI) which is used as deflator.

4. Compensation Per Employee Index

Indices on Compensation Per Employee at current prices were derived as the Index of Compensation on Compensation for the given year divided by the Index on Employment for the same period. To arrive at the constant estimates, the corresponding indices at current prices were divided by the Consumer Prices Index (CPI).

At current prices

At constant prices

For construction however, the compensation per employee index at current prices was computed as the ratio of total compensation divided by the total employment for the quarter. This computed on a monthly basis and the index of the quarter is equivalent to the average of three months of the reference quarter.

Compensation Per Employee Index	=	Compensation for Period t	X 100
		Employment for the Period t