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. This edition discusses Construction on the production as well as the expenditure side and the Revisions as of Nov. 2003.

I. Construction:
(as part of capital formation under the expenditure accounts)

In the PSNA, construction is treated as part of capital formation on the expenditure side of the accounts and as an industry under the production accounts. As part of capital formation, construction includes all new construction, addition, alteration and major repairs of residential and non-residential buildings, roads, bridges and other infrastructures including land development but excludes the acquisition cost of land. Secondary activities such as the provision of technical/engineering services and the manufacture of construction materials undertaken by construction firms, and cost of installation of equipment and machineries are included. What is accounted here is the value of construction put in place for the particular period.

The classification of construction under the expenditure accounts distinguishes between private and public construction. All construction owned by the government whether government or privately managed are classified as public construction. All other construction is classified as private.

For the quarterly estimates, the sources of data are the Building Permits compiled by NSO (for private construction), the report of the Department of Finance (DOF) on the top 14 Government-Owned and Controlled Corporations (GOCC) and the report of the Department of Budget and Management (DBM) on cash disbursements adjusted for accounts payable (for public construction) since the PSNA records transactions on an accrual basis. The annual estimate for public construction is based on the audited report of the Commission on Audit (COA), which uses the accrual accounting.

II. Construction
(as an industry under the production accounts):

This item under the production accounts of the PSNA considers all of the inclusions in construction as capital formation plus informal construction activities such as minor repairs and maintenance. What is accounted for under construction industry is its gross value added (GVA), which includes compensation of employees, capital consumption allowance (depreciation), indirect taxes less subsidies and other value added related to construction activities.

Aside from the primary data sources mentioned above, the results of the NSO Quarterly Survey of Philippine Business and Industry (QSPBI) is also utilized in the estimation of the GVA for construction industry.

III. Revisions as of November 2003

In accordance with the PSNA Revision Policy the following are some of the more substantive revisions in our Q2-2003 estimates. These are based on more complete data from our various data sources, mainly the NSO for the building permits, the WPI, the QSPBI and the MISSI, the Bangko Sentral ng Pilipinas for the BOP, the Department of Energy for crude oil and the Philippine Overseas Employment Administration for the deployment of OFW’s as well as based on the revisions made by the data sources themselves, including those made by, Bureau of Agricultural Statistics on agriculture and fishery, the Mines and the Geosciences Bureau for mining and quarrying and DBM for government services.

For the second quarter, the following revisions were made:

On the production side,

1. Agriculture and fishery was revised downward from 1.7% to 1.6%
2. Mining and quarrying up from 13.8% to 26.7%
3. Manufacturing up from 4.1% to 4.6%
4. Construction up from negative 12.2% to negative 9.5%
5. EGW up from 2.8% to 3.1 %
6. TCS up from 8.2% to 8.4%
7. Trade up from 5.3% to 5.4%
8. Finance up from 6.0 % to 8.6%
9. ODRE up from 3.8% to 4.1%
10. Private services up from 4.6% to 4.9% and
11. Gov’t Services up from 0.1% to 1.5%

On the expenditure side,

1. GGCE was revised downward from negative 8.7 % to negative12.0%
2. Construction up from negative 11.1% to negative 9.8%
3. Durable equipment down from 6.5% to 6.0%
4. Breeding stocks down from 3.7% to 3.5%
5. Exports down from 1.6% to 1.2%
6. Imports down from 6.5% to 6.4%
7. NFIA was revised upwards from 22.6% to 35.7%

As a result of all the revisions for the second quarter of 2003,

1. GDP growth for Q2 2003 was revised upward from 3.2% to 4.0% while
2. GNP growth was up from 4.5% to 6.0%

A more complete tabulation of our revisions is included in our publication (as of November 2003).

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