NSCB - Second Quarter 2003 GNP - Technical Notes on the 2nd Quarter 2003 Estimates: Series 2003-Q2

Technical Notes on the 2nd Quarter 2003 Estimates:
Series 2003-Q2

(Posted: September 29, 2003)

Technical notes on the PSNA are published in the NSCB website for a better appreciation of our national accounts. Reference should also be made to the earlier technical notes for the current national accounting practices adopted in the Philippines.

Government Services

In the PSNA, government services is part of the producing industries and refers to the activities carried out by the various government agencies/departments including national as well as the Local Government Units (LGU’s) and the social security agencies (Government Service Insurance System (GSIS), Social Security System (SSS), Philippine Health Insurance Corporation (PHIC) and the Employees Compensation Commission (ECC). For the GSIS, its operations on the General Insurance Fund (GIF), the Optional Life Insurance and the Pre-Need Plans are not included under Government Services; they are included under the insurance sector under Finance. Services provided by departmental enterprises of the government such as, the National Telecommunications Commission and the National Printing Office are not included. These enterprises are included in the sectors under which their activities are identified. For instance, the NPO is covered under Manufacturing (Publishing and Printing), while the NTC falls under Transportation, Communications and Storage. Government corporations are thus included in the industry in which their activities are classified (a list of government corporations with their corresponding classification in the national accounts will be provided in the next issue of the technical notes). Likewise, utility companies (i.e. telephone, waterworks and electricity) operated by LGU’s are excluded.

What is accounted for under government services are its gross value added (GVA), which includes compensation of employees, capital consumption allowance (depreciation), and indirect taxes paid by the government.

For the quarterly estimates, the source of data is the report of the Department of Budget and Management (DBM) on quarterly actual disbursement adjusted for accounts payable since the PSNA records transactions on an accrual basis. The annual estimate uses the audited report of the Commission on Audit (COA), which is recorded on an accrual basis and is available ten months after the reference year.

Government Consumption Expenditures

This item is found in the expenditure accounts of the PSNA and takes into account all of the current expenditures of the government including the expenditures for equipment, buildings and structures for military purposes. This is in accordance with the 1968 version of the UN System of National Accounts (UNSNA). However, in the 1993 SNA (the latest version) the government expenditures for military structures and equipment that have similar civilian use are no longer part of the current government expenditures but are included under capital formation. Only those military equipment for actual use in combat are part of the current government expenditures. Such changes introduced in the 1993 SNA will be incorporated in the accounts by 2004.

The primary data source of government consumption expenditures for the Quarterly National Accounts (QNA) is also the DBM report on actual disbursements, which is adjusted for accounts payable to approximate the accrual mode of accounting.

National Accounts Link Series

(A reiteration of what was mentioned in the previous technical notes, Series 2003-Q1-2)

The NSCB maintains a link series of the national accounts. The annual series starts from 1946 onwards while the quarterly series starts from 1981. The revised annual and quarterly 3-year series (2000-2002) released last 17 June 2003 and 29 May 2003 respectively, incorporated the updates and revisions in the data sources of the PSNA, which have not been linked to the 1946-1999 series. There were some data sources that revised their figures as far back as CY 2000 and the accounts were revised accordingly. Hence, the current series needs to be linked with the earlier series. The levels in the published and unlinked 2000-2002 3-year series cannot therefore be compared with the PSNA link series of 1946-1999. Work on updating the link series starts this September and is targeted for completion by 2004 as part of the revision program of the PSNA. Kindly refer to the technical notes, Series 2003-Q1-2, for more details about the revision.

Revisions as of August 2003

In consonance with the PSNA Revision Policy the following revisions were done for the Q1-2003 estimates based on revised and updated data from our data sources:

Upward revisions were made for:

a. Mining and quarrying from 8.9% to 13.9%
b. Trade from 5.5% to 5.6%
c. Finance from 5.0 % to 5.5%
d. ODRE from 3.1% to 3.2%
e. Exports from 3.0% to 3.6%

while the following downward revisions were made:

a. Construction from negative 3.2% to negative 3.6%
b. EGW from 3.1% to 2.9 %
c. Gov’t Services from 5.1% to 3.3%
d. GGCE from negative 0.5 % to negative1.5%
e. Durable equipment from 10.2% to 9.0%
f. Imports from 24.2% to 24.0% and
g. NFIA from 21.0% to 13.3%

With the above revisions for the first quarter 2003,

a. GDP growth for Q1 2003 remained the same at 4.5% while
b. GNP growth was down from 5.6% to 5.1%

The estimates most affected by the revisions were those of Construction and NFIA, particularly, Property Expense. A more detailed table on the sources of revision is included in the publication of the National Accounts of the Philippine (as of August 2003).

For inquiries please contact Dir. Raymundo J. Talento at (632) 895-2425 or e-mail him at rj.talento@nscb.gov.ph.