Technical notes on the PSNA are regularly 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.

Statistical Discrepancy (SD)

The present quarterly national accounts publication of the NSCB always shows two approaches (accounts) in estimating the Gross Domestic Product (GDP), namely the production account and the expenditure account. These two accounts are estimated independently and have different data sources. The primary data sources for the production accounts are established surveys conducted regularly by the National Statistics Office (NSO) while the expenditure accounts rely mostly on administrative based data. The estimates of Personal Consumption Expenditure (PCE) in the expenditure accounts, which accounts for at least 70 percent of GDP are based on various surveys and administrative record systems and on a set of indicators. However, currently, there are no quarterly expenditure surveys and the Family Income and Expenditure Survey of NSO is conducted every three years. Data provided by establishments in the quarterly surveys generally come from their accounting records. In recognition of the stronger data support to the production accounts compared to the expenditure accounts, our estimates of GDP levels and growth rates are based on the production accounts. The difference between the production and expenditure accounts is shown as the statistical discrepancy in the expenditure account.

The other sources of SD aside from those mentioned earlier include:

Data Sources Issues – This includes the sampling and non-sampling errors in surveys, difficulty in accounting for the deaths and births of establishments, irregular conduct of some surveys (in the case of fisheries) and the recall bias in some surveys like the FIES. For the administrative based data, there are cases of inaccurate reports and incomplete coverage.

Methodological Issues – There are different methodologies used for the production account and expenditure account. Deflators for the constant price estimates also vary, an example of which is the use of Wholesale Price Index (WPI) for manufacturing, Consumer Price Index (CPI) for PCE, and Producers Price for agriculture. Some of the parameters used in the estimation procedure are un-updated for lack of resources to conduct special studies or surveys. There is also the accounting issue wherein the PSNA uses the accrual method but quarterly data on government expenditures are recorded on cash basis by the Department of Budget Management. The allocation of output into quarters poses some problems and so does the estimation of the informal sector.
Coverage Issues – At present, the following are either not covered or not completely covered by the PSNA: illegal activities such smuggling and drugs, services of domestic helpers, secondary activities of employees, new players in the industry, and livestock and poultry which is not accounted for in the changes in stock.

Other countries do not have discrepancies since the component/s of the other approach/es in estimating GDP are estimated as residual. It is worth noting that small discrepancies do not necessarily mean strong estimates since the operationalization of various approaches in estimating GDP may be biased in the same direction. The PSNA chose to show the statistical discrepancy to keep the users informed on the reliability of the estimates.

Revisions as of November 2004

In accordance with the PSNA Revision Policy approved by the NSCB Executive Board and consistent with the international practice on the revision of National Accounts, the following are the revisions in our previous estimates, based on the revisions and updates made by the data sources themselves, including those made by NSO on Exports, Imports, MISSI, QSPBI, Building Permits, WPI and RPI; BSP on the BOP; the BAS on Agriculture and Fishery, the Forest Management Bureau on Forestry; Mines and Geosciences Bureau and DOE for Mining and Quarrying; NPC for EGW; and DOF for Construction.

For the second quarter, the following revisions were made:

On the production side,

• Mining and quarrying was revised upward from 2.5% to 2.7%
• Manufacturing upward from 4.6% to 4.8%
• TCS upward from 13.5% to 14.6%
• Trade upward from 6.1% to 7.1%
• Finance upward from 8.8% to 9.6%
• ODRE upward by 4.5% to 6.4%
• Private services upward from 6.8% to 6.9%
• Gov’t Services upward from 2.7% to 4.3%
• AFF downward from 4.3% to 3.8%
• EGW downward from 4.1% to 3.2%

On the expenditure side,

• PCE was revised upward from 6.0% to 6.3%
• GCE downward from 0.1% to –0.3%
• Construction downward from 10.9% to 10.6%
• Breeding Stocks downward from 0.4% to –1.3%
• Exports downward from 14.9% to 14.8%
• Imports downward from 7.0% to 6.3%
• NFIA upward from 0.3% to 0.7%

As a result of all the revisions for the second quarter, GDP growth for Q2 2004 was revised upwards from 6.2% to 6.6% and GNP growth was revised upwards from 5.7% to 6.1%.

A more complete tabulation of our revisions is included in our publication.

For inquiries please contact Dir. Raymundo J. Talento at (632) 895-2481 or
e-mail him at rj.talento@nscb.gov.ph.