LABSTAT Updates (Vol. 20 No.

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Page 3 of 4

Quezon City, Philippines

Vol. 20 No. 11

June 2016

STRUCTURE OF LABOR COST IN THE PHILIPPINES
(Last part of a series)
The 2013 Labor Cost Survey (LCS) is one of the modules of the 2013/2014 Integrated
Survey on Labor and Employment (ISLE), formerly the BLES Integrated Survey (BITS). The
ISLE is a nationwide establishment survey conducted by the Philippine Statistics Authority (PSA)
covering 8,399 agricultural and non-agricultural establishments employing at least 20 workers.
The LCS is intended to provide data that would address the gap in wage statistics,
specifically on the evolution of labor cost and its various components. Particularly, the survey
enquires on the different components of expenses incurred by employers in engaging the
services of its workers.
According to the ILO Resolution regarding labor cost statistics adopted by the 11th
Conference of Labour Statisticians in October 1966, the statistical concept of labor cost
comprises remuneration for work performed, payments in respect of time paid but not worked,
bonuses and gratuities, the cost of food, drink and other payments in kind, cost of workers’
housing borne by employers, employers’ social security expenditures, cost to the employer for
vocational training, welfare services and miscellaneous items, such as transport of workers,
work clothes and recruitment, together with taxes regarded as labor cost.
This issue of LABSTAT Updates delves on the average share of labor cost to total cost by
employment size across industries for 2013. The metadata and the statistical tables of the
survey are posted on the PSA website.
Total labor cost in the country was posted at P1,065.7 billion in 2013. Labor cost is only
a portion of total expenses incurred by employers in managing their businesses.

Share of labor cost to total cost highest in private education industry

The average share of labor cost
spent by employers in hiring
employees accounted for more
than one-fourth or 26.6 percent of
the total cost incurred in handling
business operations in 2013.

Among major industry groups,
private education led all other
industries in recording the highest
proportion of labor cost to total
cost at 27.7 percent. This was
followed by agriculture, forestry
and
fishing
(27.4%);

administrative and support service
activities (27.0%); mining and
quarrying (26.1%); information
and communications (25.9%);
human health and social work
activities
(25.4%);
and
manufacturing (25.2%). (Figure
1)

Meanwhile,
establishments
in
construction industry registered
the lowest share of labor cost to
total cost at 18.1 percent.

repair of computers and personal and household goods and other personal service activities (25. sewerage.4 26.  For large establishments employing 200 or more workers. financial and insurance activities (27.8 18.7 percent.0 percent in order to engage the services of their workers.6%).LABSTAT Updates (Vol.9 25. manufacturing (22. Entertainment and Recreation  S ‐ Repair of Computers and Personal and          Household Goods.8 18.7 24.0%).0%).2%). Small establishments had higher shares of labor cost to total cost compared to medium-sized and large-sized establishments  By employment size. This is evident in the following industries: information and communications (28. the share of labor cost to total cost for medium-sized establishments was highest in arts.7%).1 25.7%).8%).3 percent and 23. Other Personal    Service Activities  Source of data: Philippine Statistics Authority.8%). and accommodation and food service activities (21. and fishing (25.2%).2%).4%). mining and quarrying (26. forestry.0%). administrative and support service activities (29.Average Share of Labor Cost to Total Cost in Establishments Employing 20 or More Workers by Major Industry Group. Meanwhile.1 20 27. and construction (25. agriculture.9 18. Waste Management and Remediation  Activities    F ‐ Construction  G ‐ Wholesale and Retail Trade. (Table 1)  Across industries.9%). Gas. electricity.9%).6%). respectively of their total costs in labor cost. the share of labor cost to total cost of establishments is predominantly higher in small establishments than medium-sized and large-sized establishments.5 21. Steam and Air     Conditioning Supply    E ‐ Water Supply. human health and social work activities except public health activities (27. Repair of          Motor Vehicles and Motorcycles H ‐ Transportation and Storage I ‐ Accommodation and Food Service       Activities  J ‐ Information and Communications  K ‐ Financial and Insurance Activities  L ‐ Real Estate Activities    M ‐ Professional. waste management and remediation activities (26.2%).1 25 27 25. Scientific and Technical          Activities N ‐ Administrative and Support Services  P ‐ Education Except Public Education  Q ‐ Human Health and Social Work Activities  R ‐ Arts.2 23. . wholesale and retail trade (23.5 H I 22.1%). employers in small establishments with 20-99 workers relatively spent a higher share of labor cost at 24. Forestry and Fishing    B ‐ Mining and Quarrying    C ‐ Manufacturing    D ‐ Electricity. 2013/2014 Integrated Survey on Labor and Employment.  Meanwhile. and transportation and storage (23. 20 No.7 22. real estate activities (26. Philippines: 2013 (In Percent)   35 30 27.9 20. Sewerage. medium-sized establishments employing 100-199 workers and large establishments with 200 or more workers paid around 23.1 23. entertainment and recreation (32. gas. the share of labor cost to total cost was highest in private education (29.4 24. steam and air conditioning supply (26.1 15 10 5 0 A B C D F E G J K L M N P Q R S         A ‐ Agriculture. water supply. 11) Page 2 of 5 Figure 1 .

bad debts.psa.5%). manufacture of leather and related products (29. trailers and semi-trailers (26. and manufacture of electrical equipment (20. cost of workers’ housing shouldered by employer. and other labor costs e.3%).4%).c. valued at market price. Specifically.4%).4%). cost of welfare services. Labor cost – consists of direct wages and salaries.g. electronic and optical products (23.1%).1%). and indirect taxes. manufacture of motor vehicles. Donations and contributions. manufacture of wearing apparel (27.2 percent of the total cost spent by establishments in their businesses in 2013. manufacture of other transport equipment except building of ships and boats (22. other manufacturing and repair and installation of machinery and equipment (24. remuneration for time not worked. costs of good for resale. these industries include manufacture of basic metals (29. and manufacture of beverages (24. manufacture of beverages (25. manufacture of computer. and other manufacturing and repair and installation of machinery and equipment (26.0%). 11) Page 2 of 5 Establishments in manufacturing spent one-fourth of total expenditures on labor cost  Labor cost in the manufacturing industry comprised 25. cost of work clothes/protective gear.3%). payments in kind. By employment size. Aside from labor cost. losses. majority of small manufacturing establishments had relatively higher shares of labor cost to total cost compared with medium and large establishments. large establishments employing 200 or more workers had the highest share of labor cost to total cost in the following industries: manufacture of machinery and equipment. and manufacture of chemicals and chemical products (23.. income taxes. supplies.0%).LABSTAT Updates (Vol.5%). (Table 2)  Classified by minor industry group. industries which recorded the highest shares of average labor cost to total cost include: manufacture of coke and refined petroleum products (27. n. cost of training.4%) among others. contact LABOR STANDARDS AND RELATIONS STATISTICS DIVISION at 376-1921 Regarding other statistics.gov. manufacture of other non-metallic mineral products (27. small manufacturing establishments had the biggest share of labor cost to total cost at 22. FOR INQUIRIES Regarding this report. depreciation are excluded. contact KNOWLEDGE MANAGEMENT AND COMMUNICATIONS DIVISION at 462-6600 local 834 Or visit our website at http://www. industrial and non-industrial services done by others. (30.ph . transport of workers to and from work undertaken by employers and recruitment cost. 20 No.  Meanwhile.7%). manufacture of furniture (27. bonuses and gratuities. manufacture of other non-metallic mineral products (24. Definition of terms: Total cost – all expenses incurred by the establishment whether paid or payable. fuel and electricity. interest expenses.8%). employer’s social security expenditures. medium-sized establishments posted the highest shares of labor cost to total cost in the manufacture of tobacco products (29.7%).  By employment size.e.0%). these are costs of purchased materials.7%).  On the other hand.8%).2 percent.

7 27.5 22.9 21.3 23. 2013/2014 Integrated Survey on Labor and Employment.2 23.0 22. FORESTRY AND FISHING All Sizes 20-99 Workers 100-199 Workers 200 or More Workers 26.6 23.9 25.0 29.0 23.8 20.5 23.2 Human Health and Social Work Activities Except Public Health Activities Arts.9 18.1 25.1 26.6 INDUSTRY Mining and Quarrying Manufacturing Electricity.3 23. Sewerage.9 20.2 22.1 29.7 32. Source of data: Philippine Statistics Authority. Waste Management and Remediation Activities Construction 26.1 24.7 23.0 27.4 25.0 23. .6 23.0 29.2 24.4 21.8 27.8 25. Gas.3 29.7 23. Repair of Motor Vehicles and Motorcycles Transportation and Storage Accommodation and Food Service Activities Information and Communications Financial and Insurance Activities Real Estate Activities Professional.2 22. Philippines: 2013 Employment Size MAJOR INDUSTRY GROUP ALL INDUSTRIES AGRICULTURE.7 20.0 25. 20 No.3 26.1 24.8 25.2 29.4 20.3 SERVICES Wholesale and Retail Trade.8 26.7 22.9 24.5 25.4 24.8 25.1 25.6 26.5 22.9 21.1 23. Steam and Air Conditioning Supply Water Supply.1 24.0 23.Average Share of Labor Cost to Total Cost in Agricultural and Non-Agricultural Establishments Employing 20 or More Workers by Major Industry Group and Employment Size. Other Personal Service Activities Note: Details may not add up to totals due to rounding.2 26.8 18.1 25.6 25.6 24.4 27.5 20.9 22.6 27.3 26.4 19. Scientific and Technical Activities Administrative and Support Service Activities Education Except Public Education 21.9 21.7 27.6 23.0 28.1 18.LABSTAT Updates (Vol.8 27.2 24.7 19. 11) Page 4 of 5 TABLE 1 . Entertainment and Recreation Repair of Computers and Personal and Household Goods.

2 18.8 24.3 21. Straw and Plaiting Materials Manufacture of Paper and Paper Products Printing and Reproduction of Recorded Media Manufacture of Coke and Refined Petroleum Products Manufacture of Chemicals and Chemical Products Manufacture of Basic Pharmaceutical Products and Pharmaceutical Preparation Manufacture of Rubber Products Manufacture of Plastic Products Manufacture of Other Non-Metallic Mineral Products Manufacture of Basic Metals Manufacture of Fabricated Metal Products except Machinery and Equipment Manufacture of Computer.7 21.7 22.9 17. Trailers and SemiTrailers Manufacture of Other Transport Equipment except Building of Ships and Boats Building of Ships and Boats Manufacture of Furniture Other Manufacturing.9 18.   200 or More Workers .3 23.0 22.0 20.5 19.2 21.3 30.8 20.9 20.8 a Included in collapsed employment sizes.7 17.5 23.9 18.3 22.5 18.5 19.7 15.5 17.7 16.0 11.4 20.5 15.8 17.0 25.3 23.5 16.6 29.4 15.8 19.5 16.6 29.5 26.5 24.6 20.6 24.Average Share of Labor Cost to Total Cost in Manufacturing Establishments Employing 20 or More Workers by Minor Industry Group and Employment Size.8 17.8 a 24.5 27.6 22.0 16. Manufacture of Motor Vehicles.7 20.2 22.2 25. Source of data: Philippine Statistics Authority.9 23.2 a 22.6 11.0 22.LABSTAT Updates (Vol.2 21.4 21.4 22.4 25.7 19. n.7 18. Cork.5 20. Philippines: 2013 Employment Size MINOR INDUSTRY GROUP MANUFACTURING Manufacture of Food Products Manufacture of Beverages Manufacture of Tobacco Products Manufacture of Textiles Manufacture of Wearing Apparel Manufacture of Leather and Related Products Sawmilling and Planing of Wood Manufacture of Products of Wood.9 20.8 22.3 15. 2013/2014 Integrated Survey on Labor and Employment.0 20.1 18.1 29.3 a 23.6 22.3 19.3 27. 20 No.c.9 17.2 27.2 17.7 19.4 24. 11) Page 5 of 5 TABLE 2 .4 19.8 17.5 21.7 26. Repair and Installation of Machinery and Equipment All Sizes 20-99 Workers 20-99 Workers 25.7 a 22.2 18.5 21.6 21.4 17.3 24. Electronic and Optical Products Manufacture of Electrical Equipment Manufacture of Machinery and Equipment.2 17.9 19.1 23.8 23.1 17.1 24.2 22.5 - 21.0 20.2 17.e.8 20.5 18.9 17.4 21.7 27.5 26.7 20.3 24.