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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.

Efforts Toward Clarifying the Difference Between MISSI and PSNA

The Monthly Integrated Survey of Selected Industries (MISSI) and the national accounts both provide indicators/estimates for the manufacturing sector. However, they measure two different things.

The Value of Production Index (VAPI) derived from the MISSI refers to the index of the current value of goods produced during the reference period valued at producer’s price, that is, the establishment price charged to the customer. Hence, it is an indicator of the output of the manufacturing sector. On the other hand, the gross value added (GVA) in the NA is defined as the value of output minus the value of intermediate inputs used in the production of goods and services. It measures the contribution to the Gross Domestic Product (GDP) made by an industry, in this case the manufacturing industry.

The Philippine Statistical System (PSS) has been actively initiating efforts toward clarifying the difference between the MISSI and the national accounts estimates. Among the major initiatives are the following:

September 1997
Dr. Romulo A. Virola, Secretary-General of NSCB, was one of the discussants of the paper on the “The New SKEM ¹ Methodology: Towards a More Realistic Situationaire” presented by Dr. Margarita Guerrero of NSO during the twelfth session of the Development Pulse Forum, which is part of the NEDA Family’s advocacy effort to inform the public on various policy issues and concerns.

December 1998
NSCB presented the paper “Measuring the Gross Value Added of Manufacturing in the Philippine System of National Accounts” during the Seventh National Convention on Statistics.

July 1999
NSCB met with NSO to trace the possible sources of differences between the trends of MISSI and the GVA estimates for manufacturing.

January 2000
Two separate meetings/briefings with PIDS and NEDA were conducted to discuss existing issues on foreign trade statistics. A presentation was made by NSCB to discuss on-going efforts towards improving the national accounts to include among others, the existing concerns on MISSI and the national accounts.

April 2000
NSCB meeting with NSO resolved issues on how to meet the IMF’s Special Data Dissemination Standards (SDDS) Indicators for the MISSI’s value of production index and the producer’s price index.

June 2000
NSCB made a presentation to the Technical Working Group of the Economic Mobilization Group (EMG) ² to clarify the difference of the trends of MISSI indices and the GVA estimates for the manufacturing sector.

January-March 2001
The Joint Government-Private Sector Working Group on MISSI ³ tackled the improvement plan for MISSI which covered the following areas: data requirements of stakeholders, response rate, time lag, imputation procedures for non-response and the generation of other tables and indices. Validation of the 1994-based MISSI with other data and the 1985-based MISSI was also done.

February 2003
NSCB-NSO Bilateral Meeting wherein various concerns on NSO surveys were discussed; among which are the timeliness of MISSI and the deputation of selected NSCB staff to allow them to use MISSI posting sheets for national accounts estimation purposes.

July & September 2006
NSCB-NSO Bilateral Meetings tackled emerging issues/concerns on the MISSI that were observed during the recent NA compilation including the present methodology employed in computing the MISSI indices.

October 2006
Through the initiative of the NSCB chair, both NSO and NSCB submitted proposals to the Bangko Sentral ng Pilipinas to further improve the MISSI as an indicator of the performance of the manufacturing sector and as a data source for the national accounts.

In addition, the NSCB Technical Notes on the PSNA (Series 2002 Q2 & Q3) have provided some explanatory notes on how the MISSI data are used in the NA estimation.

Other Sources of Differences Between the GVA Manufacturing Estimates in the National Accounts (NA) and the MISSI

The following note clarifies further the differences between the MSSI data and the NA estimate of GVA for the manufacturing sector.

a. Estimation Methodology - The computation of the VAPI applies the month-on-month trends of the value of production of all responding establishments to last month’s VAPI to get the VAPI for the current month. The monthly indices are chained and the growth rates are computed to show the changes in the index over two points in time; i.e. month-on-month and year-on-year. ⁴ On the other hand, the quarterly GVA is computed using the year-on-year trend of the value of production of matched establishments⁵ from the MISSI. This trend is applied on a year-on-year basis to the published level of the GVA at current prices.

b. Deflator Used - The VAPI by month is deflated using the Producer’s Price Index to derive the Volume of Production Index (VOPI). The GVA at current prices, however, is deflated using the Wholesale Price Index (WPI). With the recent problems in the WPI, i.e., timeliness and its market basket, the trend of the PPI, which is validated with other price indicators, is used to extrapolate the WPI for the quarter.

c. Weights Used - The MISSI uses the value of production computed from the 1994 Census of Establishments (CE) as weights. The weights are computed as: Value of Products Sold plus (Ending Inventory less Beginning Inventory of Finished Products and Work in Progress). The weights used for GVA which is also derived from the 1994 CE is, however, based on the estimated GVA by economic activity, derived as Gross Output less Intermediate Inputs.

d. Imputation Technique - In MISSI, data for non-responding establishments are estimated based on established imputation methods, such as historical imputation (with or without trend adjustment), etc. Establishments that are reported as on strike, temporarily out of business, or stopped operation are given zero production values for the month/s reported when verified to be so ⁶ .

Imputations on the GVA estimates are based on available hard indicators from financial statements and company reports.

e. Other Data Sources for the NA – While the MISSI results are used as input in the GVA quarterly estimates for the manufacturing sector, the NA also uses other data sources to supplement the MISSI results such as data on petroleum production and prices from the Department of Energy (DOE), sugar production and prices from the Sugar Regulatory Authority (SRA), sales of automotive vehicles from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI), as well as cement production from the Cement Manufacturers Association of the Philippines (CEMAP).

f. Revision Policy Adopted by NSO and NSCB - Based on NSO’s Revision Policy, the revision of the MISSI indices is reflected on the monthly MISSI press release for a particular month, wherein the revisions are limited to the past two months. Revisions beyond the past two months are no longer reflected ⁷.

On the other hand, based on the PSNA Revision Policy (NSCB Resolution No. 8 Series of 1997), the revision for each quarterly estimation round is limited to the immediately preceding quarter, except during the May round of estimates when revisions for the rest of the past quarters can be made. Hence, for each quarterly estimation round, the GVA for manufacturing incorporates the more updated data from MISSI since the NSCB Revision Policy allows incorporation of the revisions made on the value of production beyond the past two month period.

Q1 2006 CONTRIBUTION TO REVISIONS

Based on the Revision Policy approved by the NSCB Executive Board and consistent with the international practice on the revision of National Accounts, corrections and revisions are reflected in the previous estimates, based on the revisions and updates made by the data source agencies, including those made by NSO on Exports, Imports, MISSI, QSPBI, Building Permits, WPI and FTS; BSP on the BOP; the DOE and MGB for Mining and Quarrying; DOTC for TCS; Business Processing Association of the Philippines (BPAP) for Private Services; additional Financial Statements from source companies for ODRE; DBM and DOF for Construction; DBM for Government Consumption; as well as POEA for NFIA; BAS, SRA, & FMB for Breeding Stocks & AFF; and Financial Statements from PSE for Finance.

For the first quarter, the major contributors to the revision on the production side came from:

a. Private Services, which contributed 0.13 percentage point;

b. Manufacturing with 0.07 percentage point; and

c. Government Services and EGW with 0.02 percentage point each.

The following were revised downward and made negative contributions to the revision of GDP:

a. Construction, negative 0.02 percentage point; and

b. Finance, Trade and TCS with negative 0.01 percentage point each.

Meanwhile, NFIA was revised upward, contributing 0.54 percentage point to the GNP revision.

As a result of all the revisions for the first quarter, both GDP and GNP growths were revised upward from 5.5 percent to 5.7 percent and from 5.8 percent to 6.5 percent, respectively. A more complete tabulation of the revisions is included in the publication.

References:

Monthly Integrated Survey of Selected Industries (MISSI) 2004-2005 by NSO, June 2006

System of National Accounts 1993, by Eurostat, IMF, OECD, U.N., WB, 1993.

 

1 SKEM – Survey of Key Enterprises in Manufacturing is the predecessor of MISSI

2 EMG originated as Economic Monitoring & Mobilization Task Force created under the Office of the President on 23 January 1998 to address the economic problems brought about by the Asian financial crisis. Its composition includes the Executive Secretary as chair, DTI as co-chair & with the following members: DOLE, DOE, BSP, PMS, Press Secretary, Presidential Adviser on Economic affairs & Flagship projects, DILG, DENR, DFA, DOJ, DOT, DOTC, & 10 representatives from the private sector (PCCI, Makati Business Club, Philippine Exporters Confederation Inc., Employers Confederation of the Philippines, Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., BAP, Management Association of the Philippines, Philippine Retailers Association, Federation of the Philippine Industries, & a representative from the agriculture & fisheries sector).

3 The Joint Government-Private Sector Working Group on MISSI was made possible through the Memorandum of Understanding (MOU) signed on 25 February 1998 by the DTI, NSO, NSCB, NSO, Philippine Chamber of commerce & Industry (PCCI) and the Federation of Philippine Industries (FPI). Its main task is the integration of the two major industrial surveys of the government namely, the Survey of Key Establishments in Manufacturing (SKEM) of NSO and the Survey of Manufacturing Industries of DTI in order to address the need of providing quick, consistent, and reliable information on business performance. This integration resulted into the MISSI.

4 Updated Technical Notes on the MISSI, www.census.gov.ph/data/technotes/notemissi_new.html

5 Matched establishments refer to those establishments that responded for the comparative period under consideration.

6 Updated Technical Notes on the MISSI, www.census.gov.ph/data/technotes/notemissi_new.html

7 Ibid

 

For inquiries please contact:
Dir. Raymundo J. Talento
Tel.No.: (632) 895-2425
Email: rj.talento@nscb.gov.ph

 

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