National Accounts Data Linkages by Ronald Yacat

NATIONAL ACCOUNTS DATA LINKAGES Mitsuo Ono I. Introduction The terms of reference discussed here concern the uses and linkages of national accounts (NA) data. 1 Since uses of such data are well-known, the focus of this note is to discuss data linkages, especially as they relate to improvements in NA estimation methodology. 2 It is noted that a similar type of discussion was held in the November 1976 Workshop but from a more general perspective. (See E. Makanas' "Toward an Integrated System of National Accounts" in Journal of Philippine Development, First Semester 1977.) In this regard, a comprehensive reference is: System of National A ccounts, United Nations, 1968 (designated SNA). The contents of this note cover four parts: (1) application of the flow account chart to Philippine NA data; (2) use of different accounting models to improve estimation methodology; (3) need for improving the Philippine statistical system; and (4) summary/ recommendations. Application of the Flow Account Chart A useful tool of data analysis is the Flow Account Chart devised by Professor Harry Oshima. For further details, see his "The Flow Account Chart and Its Application to the Multiplier" in the October 1962 issue of the Malayan Economic Review. This tool was also used extensively in our work on developing the Hawaiian State Product Accounts. Figures la and lb show data from the 1.982 preliminary NA data. The chart shows four sectors (each with its individual T Asian Development Bank. Comments are those of the author and not of ADB.The assistance of Joyce Cabal is gratefully acknowledged. 1. NA relates to income and product accounts. 2. Estimates typically involve both quantity (Q) and price (P) factors. In turn, each can be validated separately for population/item coverage (Q) and reporting of (P) amounts. These statistical estimation issues have been discussed in previous workshops. However, there appears a need to validate NA data by interfacing with other available economic accounting systems. This represents an initial effort. 41

JOURNAL

Figure

la.

FLOW

ACCOUNT

OF PHILIPPINE

CHART

DEVELOPMENT

1982 GNP

IN MILLION PESOS

pRODUCT

(HOUSEHOLD & NON.PROFIT INST.) PERSONAL INCOME and OUTLAY ACCOUNT

RECEIPTs

OUTLAYS

EXPENDITURES

C_mp©n_tion of Employees_ and Entmrpreneur_hlD and Property Incnmu_ of FElons 248,316 f

Pect.O hal COm_lmlptlon _r 246,31E

I In_Orr_fmm lad Prop_

Compunction of Employees and EntcrPreneurshlp a_c)PrOl:ed;yIncome

1,6"/0 3,497 ' 3,500

Income

_i_ Redduat

5ociaISecarIWE_n¢fit

,SociaJSecurwConvlbuton Current Transfers to Row Statistical bier©panty PersonalSavinl_

from GeneraJGov_, Current Tcansfers from Ocher Currenz Transfer Restof _he World

-RECEIPTS

3,252

.jr233,147

233

2:33 -13,227

II_l_¢_dnt Item)

._54,sss --Enf_ft_nmcurship

Exgcndlm_ (Vc, lOus Soui_cs)_ _=-_ Statistical 233,147 Discrepancy

pros©nil Concumption ExpendRur¢_ (Pureh_s In Input/Outpdt)

of P.... _ GENERAL GOVERNMENT

_s49s_

, P .... I Direct T_c_a_, INCOM E/_UTLAY ACCOUNT

5,124 OUTLAYS

/ G¢l_ril GoYPtIntErne* Indlr_¢,i ')'axes Le_SLlbldd©s C_rtmrat_ Tax

3_I04 _ _

_,159 4,072

3,1_

Gener_lfrom Governmentprogcrty and//Inc°me _

-_. 3!0_279 [ Indlr_cz E_n_uf_ip_/_/_ Ta_ - _ 9_19E DlrectTt_xe$ _ _ _1,_2 296

Incon_ (After

4,072 O_ 5,124 Security On Coq_orations Per_on_' 1_ Social Concrib. Curr©ntTransferfrom • ©stof the World

46127 NEOMING

Current of theTransfer WoOd m R©s_; GeneralGovt._avlngs

//-_3 21073 E15

(CAPITAL Purchases ACCT) (Inpu / t/Output) SAVINGS AND INVESTMENT ACCOUNT

_,752

(COA & I_udgetSources)

_,12=_._==7 OUTGOING

_,_-34,5E4 _,,_a4

C_pl_

NetBorrowinEfrom

mMcntal GranLs) _\-

334,635

GDP

338_512

Gross N, Produc_ Less Net Indirec_ Tax¢_ Le_. C._9 _n_,

334,6_L

98,178

(Bids. Perml¢_& PMS (Proj©ctMonls.tlnBStafO NCSDO Data on P_p,

Row

Impolls of G_od:c(Non Mcrchandl_

13,292 O_;hcrs_urchz_. Comp. of Employees to Row Prop, & Ent Income F_ctor Services _. to Row

,1,015 Cutr_nt Transfers t_ Kow 1,01_; _¥ Genital CoW_ --

t98,178

Commodity Flow Ind, Imporu for durables:

/ _ IOF WORLD REST

EXTERNAL TRANSACTIONS

65,2_)_

98,178-+GD_F

20,894

7g,49E

In¢orn,= (Row)_(3,877) _

Consumption. AEow.

NezCapltalTransf©rs\ (Inteq_ovamment

OUTLAYS

Le_ N_¢ Factor

Gross Oorr.est_,_(_pit_l Formation Fi_ed Capital Formation 87,683 IncreaSe in Stocks 10,495

13_227 SavingsofPersoro ( ._17,44_ _avinEsofCorpc_zzl_o_k 12,0"_3 Savings of Government

17,4(_

(l_vl$1on forWent/Tear)

GrOf4 Not Product

1,E70 3,_7

Capit_ CO_mption AI owan_e

26,7521,120 ' _ GCE

_Other Current i$ocial SecurityTr_n_f©rs _eo©fit to P_sons

(B_l_n¢ing Item)

Distributed)

Co.orate Undll_-ibutnd Eamlng_

'_G°vt' Consumption Expcndltur*

ACCOUNT

HSNS, ASE, ©t.¢.) (ROW)

RECEIFTS

Expor t_ of Goods (Non.Factor M©rchandi_ OtpersPurch_

N©t Exports of G(W_ds_

41,575 17_125

(NCSO F_S, BOP

( ln_l. EmL'assi_s_Non.Ro_id©nt Hous_holdl) Com_pen_tion of Employc_s f_m R©stof ths W_d E,24S _¢r_[ces 5B.';O0 and En by Row

6,238

By persoro

3,796 IT© To Persons _eneral GorE. Net Capital Tr_mf©rs

_ncral Ba_k)

_& S©r_i_s _ I --_'Not Factor Income _(3,877)

-_-

3,S00 296

Net Lendin| (8Err©wins)

Allow N_,_ In©on1© • GNP It F_tor C_

97,873 Expenditures on Grot_ N, Prnduet

29_159 (]'o_d Rer.¢ipts fr<m',9.0_ Vicwg_in_l 34,584 270_$92

(Total Dl_but_n'_nts from Row Vlewpoint_

334,635 (3,877)

Net FEeLErIflr._ from Row Expend_GDP

_38,512

ONe: NATIONAL

ACCOUNTS

DATA LINKAGES

Figurelb. CURRENT DISAGGREGATION OF EXTERNALACCOUNTS, 1982

EXTERNAL ACCOUNT (TRADE) INCLUDING NON FACTOR SERVICES OF NONRESIDENT PURCHASES)

78,498

Import of goods and services/non factor

Exports of goods and services/non factor

65,206

servicesfrom row Mdse.

servicesto row Mdse.

13,292

Others

Others Balancing item

58,700 41,575 17,125

1) ( 19,798 ) 78,498

78,498

EXTERNAL ACCOUNT (FACTOR INCOME) 18,360

Total factor paymerits to row 77 Employee compensation to row 18,283 Property and entreurship income to row

Total factor income from row Employee compensation from row 8,245 Property and entreprepreneurship income from row Balancing item

14,483

6,238

18,360

1) ( 3,877 ) 18,360

EXTERNAL 1,015 1,015

Current transfer to row By general govt. By persons

ACCOUNT (TRANSFERS)

Current transfers by row To general govt. 296 To persons 3,500 Borrowing from row

EXTERNAL TRANSACTIONS

3,796

20,894

ACCOUNT (SUMMARY)

78,498

Mdse.(Nonfactor services(Imports)

Mdse. (Non factor services (Exports)

58,700

18,360 1,015

Factor income Transfers to row

Factor payments by row Transfers by rest of world Borrowing from row

14,483 3,796 20,894

97,873

Net outlays from country's

point of view

JOURNAL OF PHILIPPINE DEVELOPMENT

Figure lc.

AVAILABLE DATA FROM CBP.FEDI - DALLY SUMMARY AND IMPORT/EXPORT DATA

[DISPOSITIONS)

EXTERNAL ACCOUNT (TRADE)

(ACQUISITIONS)

o Imporlsof goods o Freightandinsuranceon internationalshipments o Paymentsfor frclghtIo foreign carrie,s o Premiumson merchandise o Claimson merchandise insurance o Oth©rTranspo_tation o Passengarrev©nuesofforeignshippingand airlinecompenlcs o Timecharters

o Exportsof goods o Freightand Insurance on in[ernationaishipments o Receipts for frcight bydomesticcarriers o Premiumson merchandiseimports o Claimsonmerchandiseinsurance o O_cr transportation o Pas_engerfares , o Timecharters-ofdomesticcatrlers o Portdisbur_ement_

• o Portdisbursemcnts o Travel o Tourist o Business o Students o Governmtntofflclak o Others

o Tourlst(includesmerchandiseand[ivlngcxpcnses) o Tourists o Businesstr_veilers o Students o Governmentoffioials o Others

(DISPOSITIONS)

EXTERNAL ACCOUNT (FACTOR INCOME)

Employeecompensationto row investmentincome o Earningsorprofltofbranches(non-residents' incomefrom [nvcsmmntin thePhilippines otherearnintsincluderemittancesof local branchesto headofficeabroad.) o Oivld©nds o InterestpaymentS Government • o Mice.of diplomaticandconsumeroffices o Otherexpenses Other serviee_ o Premiumson lnsurance/r_in_urance o Claimson insurance/reinsUrance o Per_onalincome o Mgt. andconsultantfees o Commissions o ConstructionActivity o Communlcatlon,¢abl©tharg¢%stamps o Traffic lay_Jt_(balancesdue to¢onnecting ¢_le andtelephonecompanies o AdvertJ_Jng o Sub_rlption o Produ_er_'shareonfilm rentals o Copyrightsandpateffiroyaltk_s o Otherservices

(DISPOSITIONS)

(DISPO$ITIONS)

o o o o o o O o

Employeecompen_tlonfrom row investmentincome o Earnlngsandprofiteof Incomefrom branches financialinvestments o Dividends abroad,incl. butnot o Interestincome limited to, interest Government incomeon loans o U.$.govemrn_nt ¢xtendedtoforrlgn expenditures . parties. o Other forehlngovernment expendltul'e_in th©Philippines. Other Services o Premiumsonin_lrance(re-lnsurance) o Claimson non-mo_, In_urancc/re-_nsurance o Personalln¢ome o Mgt, andconsultentfe©s o Con_mission_ o Constructionactivity o Advertising o Subscription o Film rentals o Copyrightsandpatentroyalties o Re_lesteterentals o Communications,stampandpostese o Re==xportofconsignedmaterials o Others

EXTERNAL ACCOUNT(CURRENT TRANSFER PAYMENTS)

Private o Institetional remittances o Perlonalremittances

(ACQUISITION)

(ACQUISITIONS

Private o Inptitutlonalremittences O Personalremlttence_ o Mi#ant'_transfer_ Governmen_ o Ta_ payment_

EXTERNAL ACCOUNT (LOANS AND INVESTMENTS)

Capl_l for direct [nvtslmcntabroad Por_ol_oinvcstments Withdrawalof foreign investmentfrom thePhil$. ContractlJal obligationsof privatesector Shor_term loans Long-termLoans Bankinter-branchop©_ations Loansunderdeferred LC_s

o Othercapitel transfers

Source:Adaptedfrom Daily ForeignExchangeTr_n_ction_Manual(CBP-FEDI), CB Ne_ DigestSupplement_ Vo[. XXV_ NO,3 DatedJanuary16, 1973.

o o o o o o o

(ACQUISITIONS

Capl_l for directinvestmentinthe Philippines Portfolioinvestmen_ Withdrawalof Philippineinv;=stmerltabroad Creditagainstfutereshipments Shoat.termloans Long=_rm_o_s Bankinter-branchoperations

ONO: NATIONAL

ACCOUNTS

DATA LINKAGES

account). Intra- and intersectoral transactions are connected by lines drawn from the origin to the destination. Thus, value added from industrial activity in the form of wages/salaries/proprietorship and property income enters into the household sector as a receipt and is disbursed either as transfers or as final purchases. If utilized as a tax transfer, it flows into the government sector as tax receipts from households. If utilized as final consumption expenditures, the amount becomes part of the expenditures side of the Gross Product. The intra- and intersectoral transfer wash out in the consolidation. For example, personal savings by households enter into the Saving/Investments Account as a source which, in turn, is used to purchase capital inputs. The balancing item (Borrowing from the Rest of the World) in the capital account maintains the I = S identity. This chart can be used to identify estimation problems since it provides an overview of how different transactions link up, especially in computing the residual or balancing items. As a general rule, as more details are shown, less problems are met in explaining the composition of the residuals. A fundamental question is the adequacy of data used in estimating the control totals, the individual items that make up the total, and in some cases, the balancing items (which could be derived independently from other sources such as the balance of payments summary). In actual practice, judgment is used to test the reasonablenessof the vertical (structural) and horizontal (time series) patterns after the basic data are compiled. In this reagard, the detailed "raking" of control totals using different allocation ratios could be simulated quickly with the use of the mini-computer recently acquired by the NA Staff. Before going to the next section, it would be useful to pinpoint three estimation areas that need special attention. First, changes in the estimates of value added per worker by the organized and unorganized manufacturing sectors have been found inconsistent. Thus, Professor Oshima, in his "Appendix Note on National Accounting Data for Productivity Studies," shows that the average annual growth rate of GDP/worker in the unorganized manufacturing sector (between 1968 and 1973) is much higher than that for the organized manufacturing sector (-0.3 percent for establishments with five or more workers and 8.2 percent for establishments with less than 5 workers). I understand that these data are being checked by the NA staff. Second, preliminary studies have indicated signifi-

JOURNAL OF PHILIPPINE DEVELOPMENT

cant underreporting of household income, both in money and in kind, in the ISH. As noted in this writer's "A Preliminar Study of Income-In-Kind Underreporting in the Quarterly Integrated Survey of Households (ISH)," the Bulacan hot-house study showed an overall underreporting rate of 22 percent (16 percent for cash, 35 percent for .income in kind). Currently, this type of underreporting analysis is being conducted by the NCSO for low-income households, and findings have indicated that underreporting of income is prevalent in the ISH. The third item of special interest is the "other" export item which includes local procurement of goods and services made by nonresidents and foreign establishments. According to the NA Manual (p. 250), data on direct purchases in the domestic market of nonresident households and extraterritorial bodies are obtained from items A.5 and 7, respectively, of the Global Balance of Payments Summary produced by the Central Bank. These items include the various transactions covered in the acquisitions and dispositions noted in Annex I (Manual on Daily Foreign Exchange Transactions CBP-FED-I, Supplement to the Central Bank News Digest, 16 January 1973). It is suspected that some of these "other export" transactions should be covered under 'ffactor income payments," e.g., payments of wages to Filipino employees in the U.S. military bases, instead of "other exports. ''a To validate some of these data, it would be of considerable value to policy makers to analyze both detailed time series and cross-section data covering these amounts over time. Some of these issuesare discussed in later sections. Useof Different Accounting Models Introduction 3. It mightbe usefulto estimatethe total valueof domesticoutlaysfor the followinggroupsandcheckthe resultsagainst comparable CBdata.According to the article-"The BasesIssueStrikesat the Very Coreof Our Existence" by MalouC. Mangahas(Panorama,17 April 1983,p. 8), "employeesin Clark asof 1982 were8,000 U.S.servicemen, 700 Filipinosoldiers.;. 800 American civilianemployeesand 18,000 Filipinoemployees, mostlyhiredby servicemen asmaids,drivers .... An estimated 5,000familiesliveinsidethebases._. Subic employs 8,000 military personnel,540 Americancivilians,1.5,000Filipino employeesand 8,500 Filipino domesticsand contractworkers.An averageof 12 shipswithabout 9,000 sailorsarein port eachday in Subic."Ar0ughcomputation indicatedthat thesegroupsonly couldinvolve.direct local expenditurespossiblyapproaching $120millionannually.

ONO: NATIONAL

ACCOUNTS

The current family sists of the following:

DATA LINKAGES

tree of economic (I) The product

accounting systems con(NA) accounts system;

(2) the input-output

or interindustry (I/O) accounts system; (3) the money flow or financial Flow-of-Funds (FOF) system; (4) the Rest of the World (ROW) balance of payments (BOP) system; and (5) the wealth or balance sheet accounts system, items 3 and 4 could be considered as part of the same data system. These accounting models bridge both economic theory and economic statistics. Although the U.N. has recommended the development of an overall (SNA) framework to integrate NA data into a single system, there is still no operational model. Notwithstanding UN suggestions, doubts have been expressed whether these accounting models can be empirically integrated into a comprehensive system since each was formulated for different purposes. 4 Although these accounting systems have basic similarities, each has its distinctive data requirements. This makes it difficult to implement them under a single system. While the first four systems cover essentially flow transactions, the wealth accounts measure stock valuations. Briefly, the interindustry (I/O) accounts analyze the interdependence among industrial transactions. According to Ghosh, the I/O accounts consist of three matrices: (I) transactions among industries, (2) final demand for products produced by industries, and (3) relationships of inputs required to generate total output, s Its theoretical focus is on the production function. Figure 2 shows simply the relationship between the NA and the I/O accounts. A basic difference between the I/O and the NA accounts is the disaggregation industry on model, only In addition, cients that certain

of data shown. The I/O model shows detailed data by transactions of intermediate goods, while in the NA transactions of final products by sectors are shown. in the interindustry model, the technological coeffimeasure the amount of inputs necessary to produce a

amount

of output

are of primary

interest.

Both

systems,

4. See Stanley S. Sigel, "An Approach to the Integration of Income and Product and Flow of Funds National Accounting Systems: A ProgressReport," The Flow-of.Funds Approach to Social Accounting: Appraisal, Analysis and Applications, Conference on Researchin Incomeand Wealth, Studies in Income and Wealth, Vol. XXVI (Princeton:PrincetonUniversity Press,1962). 5. A. Ghosh, Experiments with Input-Output Models (Cambridge: Cambridge University Press,1964).

JOURNALOF PHILIPPINEDEVELOPMENT

Figure 2a, LINKAGES BETWEEN NA AND I/O MODELS INDUSTRY A 50

Salesto persons

Sales\toindustry B

Wages

Sales_ Industry C

/Depreciation /Profits

•

5 15

INDUSTRY B 100 25 25 10

_ e_ Sal s " Salesto Government Salesto Industry_l

Wages"

100 25 10

Depreciation Purchasesfrom A

5 20 60,

DUSTRY C 60

Salesto Persons

Wages Profits from A hasesfrom B

15 5 30 10 60

HOUSEHOLDS \ 80 25 15 30

Wages (A) Wages(B) Wages(C)_ Profits(A & B & C)

_Purchases (A) Purchases(B) Purchases(C) Govt. payments

150

' 25

/_G_V

HouseholdTax

ERNMENT " _ Savings

Purchases(B)

(10) 25 25

5 5 (1O)

50 2.5 60 25

• . /,SAVINGS Depreciation (A) Depreciat(on (B) Savings v'

AND INVESTMENT , Capital formation

.:.

• ONO:NATIONALACCOUNTSDATALINKAGES

Figure2b. LINKAGES BETWEEN NA AND 1/0 MODELS; NATIONAL PRODUCT ACCOUNTS

PRODUCT

EXPENDITURES

120 WAGES 30 DIVIDENDS 1_.__0 DEPRECIATION

PCE GOVERNMENT PURCHASES

135 25.-

160

INPUT AND OUTPUT TABLE INDUSTRY TO__

A B C

20 .

30 10

50 25 60

25 -

100 60 60

WAGES DIVIDENDS DEPRECIATION

80 15 5

2.5 10 5

15 5

_ -

120 30 10

I00

135

160

INTERMEDIATE INPUTS GROSS VALUE ADDED

HOUSEHOLDS: GOVT. TOTAL

VALUE ADDED RATIOS FOR WAGES: A= 80 100

- .80

(.80) (GROSSOUTPUT)

ESTIMATED•WAGES

25 B -

+ .42

GROSS OUTPUT

NET VALUE ADDED

INTERMEDIATE INPUTS + VALUE ADDED

15 C -

.25

60 INFORMATION OBTAINED FROM:

GROSS VALUE LESS DEPRECIATION CHARGES AND INDIRECT TAKES NET OF SUBSIDIES

ECONOMIC CENSUS COST OF PRODUCTION SURVEYS, ETC.

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OF PHILIPPINE

DEVELOPMENT

however, measure the value of output of goods and services during a given period. In contrast, as shown in Figure 3, the financial accounts (assets and liabilities) attempt to identify monetary and credit transactions and the amount of these transactions. Financial transactions data, of which the domestic items are washed out in the NA consolidations, are shown in detail. As in the NA, the theoretical basis of the financial accounts is the saving-investment identity. Sources and use of transactions of financial and related institutions are analyzed. BOP data show both financial and real transactions between a country and its external (ROW) sector. Einally, the balance sheet accounts measure the stock value of assets, liabilities, and net worth or national wealth as of a certain date. Net worth or wealth relates to the value of tangible domestic assets and net foreign assets. Common elements of these modelsare: (1) For the NA, product equals expenditures. Also, saving equals investment. For the I/O, purchases equal costs. For the financial (FOF and BOP) accounts, sources of funds (savings and borrowings) are equal to uses (investment and lending) of funds. For the balance sheet accounts, assets equal liabilities plus net worth, and national wealth equals net worth of households and nonprofit organizations, business, and government. (2) They are essentially aggregative systems. (3) They are used primarily to study the structural interdependence among different economic sectors of the economy. They also provide the framework by which more detailed economic behavior relationships (e.g., production function, income function, consumption function, saving function, investment function, etc.) can be analyzed. Their overall linkages are found in Chart 1. Applications To Improve Estimation Methodology Although the full integration of the NA, I/O, Flow of Funds (FOF) and Balance of Payments (BOP) data is not yet feasible, estimates derived for these accounting models can be validated against each other. Thus, as shown in Figure 2 which depicts how I/O and NA data are related (as discussed in the Manual on the Philippine System of National Accounts: Framework, Sources and Methods, NEDA, 1978), value added ratios are applied against industry gross output data to obtain value added by factor inputs. These are then aggregated to come up with NA estimates by industrial sectors. The important question is the validity of the data

ONO:NATIONALACCOUNTSDATA LINKAGES

Figure 3a. LINKAGES BETWEEN NA AND FOF USING HOUSEHOLD EXAMPLE

(SOURCES)

HOUSEHOLD ACCOUNT

(USES)

INCOME

CONSUMPTION EXPENDITURES -1_

TRANSFERS RECEIVED

TAXES SAVING

(SOURCES)

NA/SAVING: r-

SAVING

¢,

INVESTMENT ACCOUNT

(USES

HOUSING INVESTMENT

CAPITAL CONSUMPTION

NET FINANCIAL INVESTMENT

ALLO_ (SOURCES)/

.FOF FINANCIAL ACCOUNT

NET FINANCIAL INVESTMENT (SAVING)

CASH DEPOSITS

CONSUMER CREDIT

SECURITIES

LOANS

OTHER LOANS MADE

(USES)

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PHILIPPINE

DEVELOPMENT

Figure3b. FLOWOF FUNDSACCOUNTSFORTHE ECONOMY 1) HOUSEHOLOSAND SOURCES(S) 12

UNINCORP, BUSINESS

INCOME AND OUTLAY Receipts

USES (U) 6

Outlays

._.. _.f_

(S)

12 6

Gross saving

DOMESTIC CAPITAL FORMATION

Gross saving _

(S)

FINANCIAL

(U) Gross domestic capital formation

2 4

Net financial investment-

INVESTMENT

(u) Net in_rea_¢ in domestic

Net financial investment

Net increase in foreign as_cets

4 aS_ts

(S)

FINANCIAL

INVESTMENT TRANSACTIONS X

Consumer credit

7 2 4

Other Ioan_ MortSages ' / Net increasein domestic assets

Money

Other Equitydeposits in life insurance, et= Govt, securities Corp, securities

, 3. 4 (1) 7

23 2, CORPORATIONS, NON=FINANCIAL

• iS) 4

INCOME AND OUTLAY Receipts

(U) Outlays Gross saving

2 2 4

t. _''_/ (S) 2

DOMESTIC CAPITAL

FORMATION

Grosssavings _

(U) Gross domestic capital formation Net financial investment

6 (4)

(S) .(4

FINANCIAL

INVESTMENT

Net financial investment

(U) Net increase in domestic Net in¢re_t_ in foreign assets

(4)

assets

(S) 12 2 6 (7)

FINANCIAL

3 3

3 .

INVESTMENT TRANSACTIONS

(4) (7) (U).

Corp• securities

Money

Mortgages Other loans

Other deposits Govt, securities

2 I

Net increasein domesticassets

Confiner

13 (S)

-•

credit

13 FOREIGN r ASSET TRANSACTIONS Netincrease in foreign assets

(U) Others

• 3. 3

• :

ONO: NATIONAL

ACCOUNTS

DATA LINKAGES

Figure3b (Continued) 3) FINANCIAL

SOURCES(S)

INCOME AND OUTLAY

Re_ipts

. ./ / DOMESTIC CAPITAL INFORMATION

(S) *

Gross _vinss

(S) 0

INSTITUTIONS

FINANCIAL

USES (U)

Outlays Gro_ savin_ {U) Gro_s domestic capital formation

Net financial investment

INVESTMENT

Net fin,lnclal investment _

(U) Net increasein domestic Net in_-ea_, in fo_iBn

12)

_ts

0 2

0 /_ (S)

FINANCIAL

INVESTMENT TRANSACTIONS / /

Money 3 2

Equity in life ifl_Jrance, eft. Net in_re_¢ In domestic _tet5

(U) Go_. securities

Consumercredit Other loans

8 13

32 7

32 Other deposlt_

(S)

,If

Corp, securiti_

FOREIGN ASSET TRANSACTIONS

4 (U)

J 12)

Net Increasein foreign a._ts

Gold and foreign exchange

Amount as_lmCdindBnlficant

Other

(1)

(1) (2)

4) GOVERNMENT (S) 10

INCOME AND OUTLAY Receipts

(U) OuUays Grosssavings

(S) S

DOMESTIC CAPITAL FORMATION Gross _vings dr/

(U) Gro_ domesticr..apI_l formation Net finan_iil Investment

$ FINANCIAL Net fina_ckd inv¢stment

INVESTMENT

(U) Net increasein foreign a_ets Net increa_ in domestic

• "

4 I 5

•

(S)

5 5 10

1 a_ts

(S)

FINANCIAL

EqulW in fife inc_n'anc¢,et_.

Net inc.ro¢_ in domestic _

Govt. _.urltles

INVESTMENT TRANSACTIONS /I

_/"

1 (U)

Money

Corp, _urities

Other deposits

5 2

JOURNAL

PHILIPPINE

DEVELOPMENT

Figure 3b (Continued) 5) TOTAL ECONOMY (S)

INCOME AND OUTLAY

Receip_

(U)

Otlt]ays Gross savings

•(S)

• DOMESTIC CAPITAL FORMATION

Gross siv_ngs _

{U) Gross domestlccapital formation Net flnanc_ investment

(S)

FINANCIAL

12 1

INVESTMENT

Net financial investment _

(U) Net Incn_

in domestic

, Net as.._ts increasein foreign 1

0 1

(S)

DOMESTIC FINANCIAL

INVESTMENT TRANSACTIONS f

Money

4 3

Equity In life insurance, eta. Govt. Securities

Consumer credit

4 7 13 12

Mortg_s Other deposits Other loans Corp. t_curiti_

Equity in life insuranceetc. GovL _¢urides

Money

(S)

(U) 20 4 3

Consumer credit

Mortl_ps Odor deposits Other loans Corp. _ecurities

4 ? 13 12

13 2 1S

FOREIGN ASSETS TRANSACTIONS Net inexea_ in foreign a_ts

Drived from: Net/o_l Incom_ _d Economic A ¢countlng by W,I. Abraham P_nflce- Hall, Inc. 1969; p, 199

(U) Gold andforeisn exchange Other

(1) 2 1

ONO: NATIONAL

ACCOUNTS

DATA LINKAGES

Chart Among

Interrelationship

Four Economic

income and product account Gross national

I -

)

Accounting

Systems

product by institutional _ctor i

Value of

Private income -and ouUay by instffutional

BUSINESS

product by industrial sector Value of

Personalincome and outlay account

J _be

HOUSEHOLDS

sector

Consumption expenditures by industrial sector

Governmental receipts and outlay account

)" J

Receipts outlay by and kind of government

GOVERNMENT

Government expenditures by industrial sector

the-world Best-of account

External )' Jj

REST OF THE WORLD .

transactions

Export_ by industrial sector

Gross saving and investment

SAVINGSINVESTMENT

Changesin _ssets and liabilities by institutional sector

In_rindustry ac_oun_l_s

Stock of assets_l and liabilities by institutional Sector

good outlay by industrial sector Investment Income-Product a_.COU nts

_ Financial _ccounts

Source: Derived from The Notlonol Economic AccounU_ joint Economic Committee, Congressof the United StateS,BSth CongresS,First Session (Washinllton: Government Printing Office, 1957),

reproducible goods by industriat sector Stock of Balance sheet aGgounts

FUNCTION

JOURNAL

OF PHILIPPINE

DEVELOPMENT

sources used to derive these historical value added ratios, many of which were obtained from establishment censusesand surveys taken about five years ago (1978). Also, although not strictly comparable, FOF and BOP data can be used to check NA estimates. For example, foreign trade data, obtained from Customs •documents, can be checked against CB's foreign exchange remittance reports. Also, financial transactions data used in computing the saving residuals can be validated with each other. Thus, in the NA data, although financial investment data for the domestic sector are eliminated in the consolidation process, financial investment flows are shown in detail in the FOF (and the BOP) data. Consequently, the balancing items (personal savings, ROW borrowings, etc.) could be double-checked using annual data Obtained from the FOF and BOP estimates. To do this testing, however, the detailed FOF and BOP estimates will have to be produced almost simultaneously when the NA data are estimated. Notwithstanding remarks to the contrary, this cross-checking appears feasible and should improve the consistency of the NA estimates. A specific example on how this can be done follows. According to A System of National Accounts, United • Nations, 1968 (p. 132), "the excess of the net acquisition of financial assets over the net incurrence of liabilities by a resident institution is equivalent-to its lending. Net lending and capital transfers are the ways in which the savings of an institution is made available to other economic agents. Financial Institutions play a key role as middlemen for transactions in financial assetsand liabilities." In the Balance of Payments Manual, Fourth Edition, International Monetary Fund, 1977 (p. 17-/), this linkage between the NA (net •lending) and BOP (net acquisition of financial assets) is examined further. It notes that net lending (consisting of exports and imports of goods and services, other current receipts and disbursements and other net lending) includes:• * the counterpart for the monetization and demonetization of g01d excluding purchases and sales of any gold, in addition to monetary gold, that is deemed to be held as financial assets; * the capital gains and losseson arbitrage transactions in financial terms * the write-off of bad debts. It excludes: • * the: market• value Of the goods Shipped under financial :leasing

ONO: NATIONAL ACCOUNTS DATA LINKAGES

arrangements but including the rental feesâ&#x20AC;˘ earned under such arrangement; * shipments of commodities between a parent enterprise and its subsidiary that do not involve a changeof ownership. * earningsreinvested in direct investment enterprises. The manual noted that there might be other differences between the NA "Net Lending" and the BOP "Net Balance" in the current account, depending on the interpretations of _he definitions used. It also noted past attempts to compare in detail the two classification systems and ended in the following: "it is virtually impossible from a technical standpoint to devise a common classification system between the two accounts." Although comparison of highly refined data may not be feasible between the two systems, this writer believes that cross-checkingbetween the NA and BOP "net lending and capital transfer" residual item could still be done using data obtained from CBP-FED I. This rough comparison would at least provide information on whether the NA estimates are within "ballpark" range or not. More relevant is the use of FOF data to check out the residual item in the external transactions account. Thus, M. Superticioso ("Highlights of the Flow of Funds in the Philippines, 1974-1976," Papers and Proceedings of the First National Convention on Statistics, NEDA, 1978, p. 577) showed that the gross saving of the external sector was _1,720 million while the gross investment was 1_1,961.6 million. The deficit was 15"241.6 million in 1974. The deficit in the NA external sector accounts in 1974 was 1"957 million. These figures should be reconciled against each other. Need for Improving the Philippine Statistical System Clearly, if NA and other accounting model estimates are to improve, the Philippine Statistical System must be made more responsive to meet their basic data needs. This was discussedin detail in the paper entitled "Towards a Major Revamp of the System of Establishment Inquiries" by Director Samson presented at the Third National Convention on Statistics. Problems found are welldocumented, i.e., lack of timeliness, coverage problems, questionable validity, and the like. For the Integrated Survey of House-â&#x20AC;˘ holds, some of the problems identified by this writer in a separate study are:6 6.

See my

preliminary

report on "Findings

and Recommendations to

JOURNAL OF PHILIPPINE DEVELOPMENT

* * * * * *

Questionnaire design is too complex Sampling design is too complex Problems in frame updating Difficulties found in collection/field operation Inadequate controls to reduce questionnaire errors in the field Inappropriate processing design given the recurring changes being made (instead of a production-type processing design, an exploratory type processing design may be more applicable to better adapt to the many changes in formats and multiple data requirements). Thus, it appears that every quarterly survey is a system by itself. * Delay in publication due to the above. For the establishment surveys, I also noted the following problem areas: * High nonresponses (20 percent) and late reporting by establishments * Late publication of reports * Inconsistency of published data * Need for review of imputation procedures * Need to improve updating of sample frames * Need to relate enterprise and establishment data * Need to relate final product and production commodity classifications Although ongoing activities are aimed toward eventual resolution of these problems, clearly NCSO needs critical additional resource support and technical assistance.Hopefully, the designation of NCSO as a critical agency by the Executive Committee would result in the expeditious provision of these badly needed resources. Summary and Recommendations The main point expressed here is the need to utilize available technical expertise and sources of information to cross-check or expand details of current NA estimates. For example, NA data on the external sector can be improved if the NAS and CB-BOP and FOF staff could work together simultaneously on their accounts. Improvethe Capabilityof the NationalCensusand StatisticsOffice (NCSO) to ProduceStatisticalInformationon Income,Employmentand Establishment Activities"submittedto the NationalEconomicand DevelopmentAuthority, 14 March1983.

ONO: NATIONAL

Information

ACCOUNTS

DATA LINKAGES

from these sources could be used to broaden the details

in the NA tables. Thus, estimates obtained using different ologies could serve to cross-check each other. of

method-

In this regard, it may also be useful to compile an inventory data sources that could be used to cross-check NA estimates

using different estimation techniques. Since the National Census and Statistics Office (NCSO) is the key agency to produce the basic data necessary for NA estimation, it should be provided with sufficient resources and technical assistance. Finally, the most important recommendation here is that the proposed Interagency Committee on the National Income Accounts be designated "lnteragency Committee on Economic Accounts" so that its responsibilities can be broadened to include the validation of NA data using estimates from other economic accounting systems such as the I/0, FOF, and BOP systems.

Postcript Classificationof EstimationMethodologies It might be useful to note linkages/relationships among estimation methodologiesfor the economicaccounts. Publicationssuch as the SNA, country national income documents, e.g., National Income in Korea, and textbook sourcesdescribe these methodologiesin detail. On the expendituresside,estimarion technologycan be divided essentiallyinto demand, supply and funding approaches.Demand side estimatesare computed usingdata compiledfrom the purchaser'sside, e.g., households,government. Data sources include family budget studies,government budget statistics,etc. Supply side estimatesutilize data obtained from salesor production reports, e.g., commodity flow method, retail salesor valuation, and others. The funding estimationmethodsusedata sourcesobtained from flow-of-fundsanalysesandfinancial data. On the income side, estimates can be derived from data sourcesshowing: (1) payments madeby disbursingunits, e.g., enterprises,governmentandother, covered in annual reports,socialsecurity tax base reports, reportsof financial institutions, etc., and/or (2) payments recorded by receiving units such as householdsenterprises,etc., and as reported in householdsurveys,and other data sources. Hence, since economic accounting involves credit and debit (incoming and outgoing) entries, NA data can be estimated and validated using various approachesas noted above, in this regard,the inventory of data sourcesthat

JOURNALOF PHILIPPINEDEVELOPMENT

could be used to validate NA estimatescan be classifiedunder the following headings:

Iricorrle

Income payments; outgoings from enterprises, governments, etc. income receipts, incoming, e.g., by households, governments, etc. Expenditures Supply

Demand Funding

-- Commodity flow method -- Enterprise tax data sources -- Retail sales/Valuation method -- Household survey sources -- Tax basedata sources --

Flow of funds Savings/lnvestment analyses

ONO:NATIONALACCOUNTS DATA LINKAGES

Annex 1 The following is a reproduction of the Manual on Daily Foreign Exchange Transactions (CBP-FED I) issued as a supplement to the Central Bank's News Digest on 16 January 1973. Notes on Details of Daily Foreign ExchangeAcquisitions:MerchandiseExports (Table 2.1) Each merchandiseexport transaction should be reported individually in Table 2.1. H. Export Bills Purchased consistof drafts or billsof exchangedrawn by local exporters and actually purchasedby the reporting bank. These drafts or bills of exchangedrawn may be payable at sightor after a certain specified period of time. The value to be reported excludesproceedswhich are deducted abroad (and not sold to the bank) for payment of creditsextended againstfuture export shipmentsand production credits payable under the export deductionscheme. I. Proceeds of Exports Received consistof payments for exports receivedby the reporting bank from its foreign correspondentbanks(as evidencedby a correspondingcredit advice on the reporting date). These includeactual receiptsof advancepayments,etc. (pleaserefer to item 26, page6). These do not include proceedsof export bills previouslypurchasedby the bank and reported earlieras merchandiseexports underitem H. J. Adjustments represent corrections of prior periods' entries on export receipts, including refund by the exporter of prepaymentson future shipmentson accountof non-shipmentor undershipment-Positiveadjustments should be prefixed by a plus (+) sign; negativeadjustmentsby a minus ( - ) sign. Notes on Details of Foreign ExchangeAcquisitions: Invisiblesand Interbank Transactions(Table 2.2) Each invisible transactionshould be reported individually within each of the three main categories.For control and referencepurposes,reportingbanks are required to mintain separate records for each of the three categoriesof invisiblesreceipts:(1) services,(2) transfer payments, and (3) loans and investments. For definitions, pleaseseeitems 41 - 43 aboveand Appendix I. For interbank transactions, only the total for each category should be reported. Notes on Details of Daily Foreign ExchangeDisposition:MerchandiseImports (Table 2.3) Each import transaction should be reported individually within eachof the two categoriesof Table 2.3.

CBP-FED 1 Table 2.2 (RevisedJan. 1, 1973) {Nameof Bank) Detailsof ForeignExchangeAcquisitions:Invisiblesand Interbank Transactions For

Item and Beneficiaryof Invisible

tnvisibbes

,19 __

Sourceof Invisibles and Seiling Bankfor Interbank Transactions

' Origin of Invisible Remittance {Country)

FaceValue in US$ Equivalent

BuyingRale

46.

Services

47.

Transfer payments

48.

LoansandJnvestments TotaF-- Invisibles

C -n Z _> r-

InterbankTransactions

O "R '10

49.

Purchases from Central Bank

50.

Purchasesfrom other banks

51.

Net withdrawarof re'ryes on foreigncurrencydeposits

.1: r-

Total - Interbank Transactions

Z m 0 m < m f0

"10

Total Acquisitions:Invis_bEes and InterbankTransactions

m Z -4

ONO:NATIONALACCOUNTSDATALINKAGES

M. Covered with L/C consist of importations coveredwith regular import letters of credit actually paid during the day including down payments against stand-by Lie's. Actual amortizations payments againststand-by L/C's and deferred L/C's are to be reported as loan repayments under item 54 below. For definitions, pleasesee Item 36 above. N. Others consistof importationsthru channelsother than I. C. (e.g.,through O/A and D/A arrangements.) For the latter two modes of importation involving trade credits, the bank's reference number should be entered under the "LiC No." column. O. Adjustments represent corre.ctionsof prior periods' entries on import payments, including refund by the reporting bank of the importer or downpaymenton referredletters of creditcancelled,withdrawn or adjusted. Positiveadjustmentsshould be prelivedby a plus ( negativeadjustments by a minus(-) sign. Notes on Details of Foreign ExchangeDispositions:Invisiblesand Interbank Transactions(Table 2.4) Each invisible transaction should be reported individually within each of the three main categories.For control and reference purposes,reporting banks are required to maintain separaterecordsfor each of the three categoriesof invisible receipts. (1) services,(2) transfer payments, and (3) loansand investments.For definitions, pleaseseeitem 41 - 43 aboveand Appendix. For Interbank transactions,only the total for each cateogry should be reported. Notesto Scheduleof import Letters of Credit Transactions(Table2.5) 15. This table traces a transaction coveredby a Letter of Credit through its various stages of developmentfrom contingent liability to real liability and thence to actual payment. It shouldshow the summary of total outstanding letters of credit at the end of the previousday and at the closeof the current transactionday. The changein the balancesbetweenthose two datesshouldbe fully supportedby individualtransactionsfor the day. 16. Transactionsfor the sametype of L/C shouldbe reported individually within the three groups.To identify the I_atureof the transactionthe amount should be placed in the correspondingcolumn, i.e., when reporting a newly opened L/C during the day, the amount is placed under the "opened" column; when a draft drawn againstthe L/C is acceptedby the reporting bank during the day, the amount isplacedunder "accepted" columns;etc. R. Regular Letters of Credit (L/C) consist of letters of credit opened for commodity imports, including cash letters of credit. The commodity reported in this table shouldbe the samecommodity indicated in the pro-

JOURNALOF PHILIPPINEDEVELOPMENT

forma invoice submitted to the External Trade Department (formerly to the Current Imports and Commodity ClassificationOffice)of the Central Bank. S.

Deferred L/C's cove: letters of credit opened for capital goods, with maturity of one year and beyond includingthose revolvingin nature. For this report's purposesthe amount of the L/C to be reported shouldbe the deferred portion only. For revolving deferred L/C's the amount to be reported should be the total credit exposureof the bank, net of downpayment.

Appendix I INVISIBLE ACQUISITIONS I.

5ER VICES Freight and Insurance on International Shipments Receiptsfor freight by domesticcarriers-- receiptsof carriersfor shipmentsof merchandisefrom the Philippinesto foreign countries. Premiums on merchandise imports - premiums received by local insurancecompanieson shipmentsfrom the Philippinesto foreign countries or vice-vers_ Claims on merchandise insurance -- receipts from foreign insurance companies as payment for merchandiseshipmentslost or damaged while in transit. Other Transportation Passengerfares - payments to local shippingand airline companiespaymentsto local carriersin connectionwith transport of persons. Time charters of domestic carriers - receipts for the payment of charter parties,time charter partiesor contracts of affreightment. Post disbursements- receipts for fuels, oil, ships' store and similar supplies,stevedoring,harbor and airfield fees, tonnage fees and repairsand maintenanceof vesselsand aircraftsof foreign registry. Tourism (includes Maintenance and Living Expenses)

ONO:NATIONALACCOUNTSDATA LINKAGES

Tourists -- expendituresin the Philippinesof tourists incidentalto their travel. Businesstravellers- all expensesin the Philippinesincidentalto travel includingpurchases of goods. Students- remittancesto personsstudyingin the Philippinesfor maintenance,tuition, books and other educationalexpenses. Government officiaJs- expendituresfor foreign governmentofficials visitingthe Philippines. Others (health and medicaltreatment,pilgrimages,etc.) = expenditures for health and medicaltreatment, pilgrimages,etc. Investment Income Earningsandprofits of branches Dividends Interestincome

) ) ). ) )

income from financial investments abroad, including, but not limited to, interest incomeon loansextended to foreign parties.

Government U.S. Government expenditures - peso purchasesof U.S. government agenciesin the Philippinesand encashmentof U.S. treasury warrants issuedto private individualsor entities. Other foreign government expendituresin the Philippines- maintenanceof diplomatic andconsularoffices in the Philippines. Other Services Premiumson insurancere-insurance- insurancepremiumsreceivedby localcompaniesfor life, marine,fire and other insurancerisks. Claims on non-merchandiseinsurance/re-insurance- receipts from foreign insurancecompanies representingpayments on claims on life, marine,fire insuranceand other insurancerisks. Personalincome- salaries,etc. - earningsabroadof residentsinwardly reinitted.

JOURNALOF PHILIPPINEDEVELOPMENT

â&#x20AC;˘ Management and consultant fees - fees paid to local companiesor individualsby firms or individualsabroad. Commissions- earningsof agents,underwritersand indentors. Constructionactivity - proceedsof contractsof localcontractorswith foreign basesin the Philippinesandfirms abroad. Advertising= receiptsof local firms for advertisingservicesrendered hereor abroadfor foreign companies. Subscription-payments on foreignsubscriptionto localpublications. Film rentals -- rentalson local motion picture films paid by parties abroad. Copyrights and patent royalties - fees receivedfrom non-residentsfor the useof patentsand copyrights. Real estate rentals -- grossreceiptsfrom partiesabroad for leaseof real estate in the Philippines. Communications, stamp and postage - receipts of local entities on account of postageand useof telegraph, telephone and radio. Re-export of consigned materials - proceedsof re-exports net costsof raw materials consigned-in. Others - receipts from servicesthat cannot be classified in the appropriate accounts. II.

TRANSFER PAYMENTS Private Institutional remittances -donations receivedfrom private institutions, including missionary, educational and other benevolent contributions, private compensation payments for private damage,and noncontractual pension payments. Personalremittances -donations received by private individuals. Migrant's transfers - receipts from migrants or immigrants of real and financial capital brought into the Philippines in connection with

ONO:NATIONALACCOUNTS DATA LINKAGES

their migrationor immigration. Government Tax payments - taxes paid to the Philippine government. III. LOANS AND INVESTMENTS Capital for direct investment in the Philippines - receipts for investment made to create or expand some kind of permanent interest in a local firm or enterprise. This includes additional capital contributions of foreign firms in their local branches and subsidiaries except assignedcapital of branchesof foreign banks. Direct investments imply a material influence on the policies of the firm where investment is made. Portfolio investments - refers to foreign investments in issuesof Philippine stocks and bonds. Withdrawal of Philippine investment abroad - proceeds of saleof assets abroad, retirement of bond holdings and stocks of enterprises abroad. Credit againstfuture shipments- proceedsof credits madeon exports that have not yet been transferred to foreign ownership including red clausedrawings. Short-term loans -- proceedsof loans with maturity of one year or less from institutions abroad obtained by residents. Long-term loans - proceeds of loans with maturity of more than one year from institutions abroad obtained by residents. Bank inter-branch operation - remittances _of head offices of foreign banks to local branch.

INVISIBLE DISPOSITIONS I.

SERVICES Freight and Insuranceon International Shipments Paymentsfor freight to foreign carriers - payments to foreign carriers

JOURNALOF PHILIPPINEDEVELOPMENT

for shipment of merchandise between foreign countries and the Philippines. Premiums on merchandise- premiums paid by residents to foreigners on imports insured abroad. Claims on merchandise insurance - payments by resident insurance firms to non-residents for merchandise exports lost or damaged while in transit. Other Transportation Passengerrevenues Of foreign shipping-and airline companies - payments by residents to foreign carriers in connection with transâ&#x20AC;˘port of persons. Time charters - payments by domestic operators to foreigners for time charter of foreign_wned vesselsand aircrafts. Port disbursements - disbursements abroad other than for time charters by domestic carriers including payments to foreigners for bunker fuels, ships' stores and similar supplies,harbor and airfield fees, tonnage and repairsand maintenance. Travel Tourist -- expenditures abroad of residents incidental to t_heirtravel, except transportation on foreign carriers. Business - expenditures of businessmen abroad incidental to their travel including purchasesof goods. Students - remittances to persons studying abroad for maintenance, tuition, books and other educational expenses. Government officials abroad.

expenditures of

local government officials

Others - expenditures for health, medical treatment, pilgrimages,etc. Investment Income Learningsof profits of branches

) )

non-residents' income from investment in the Philippines. Other earnings

ONO: NATIONALACCOUNTSDATA LINKAGES

) )

Dividends

include remittances of local branches to headoffice abroad.

Interest payments - non-residents'incomein the form of interest on bonds issued by local entities or from loans granted to resident firms or individuals. Government Maintenance of diplomatic and consular offices - remittances for the maintenanceof diplomatic and consular offices abroad. Other expenses - expenditures abroad by military Philippines stationed in foreign countries.

agenciesof the

Other Services Premiums on insurance/re-insurance -- life insurance premium payments made by residents to foreign insurancecompanies. Claims on insurance/re-insurance - payments made bY resident insurance companies on claims on life insurance to non-resident beneficiaries. Personal income (includes salaries and/or savings of technicians) earningsof foreigners employed in resident firms remitted abroad. Management and consultant fees - fees and reimbursements paid to non-resident firms or individuals by residents. Commissions - payments to agents,underwriters and indentors. Construction activity - payments of contracts of foreign contractors and firms abroad. Communication, cable charges,stamps Traffic layouts and/or balancesdue to connectingcable and telephonecompanies Advertising abroad.

) ) ) ) )

covers international settlement â&#x20AC;˘ on account of postag% use of telegraph, telegram and radio facilities.

payments for advertisementsof firms in publications

JOURNALOF PHILIPPINEDEVELOPMENT

Subscription - payments on subscriptionsto foreign publications. Producers'shareon film rentals - payments on exposedmotion-picture film not brought by local importers. Copyrights and patent royalties patents and copyrights.

fees paid for the use of foreign

Other services- disbursementsfor servicesthat cannot be classified in the appropriateaccount. II.

TRANSFER PAYMENTS Private institutional remittances -- donations made by resident private institutions, including missionary, educational and other benevolent contributions. Personal remittances -- donations, gifts made by residents to nonresidents.

iii. LOANS AND INVESTMENTS Contractual obligations of private sector - remittances to non-residents on obligations of residents. Short-term loans -- payments of loans with maturity of one year or less to institutions abroad. Inter-branch operation to head office.

remittances of branches of foreign banks

Withdrawal of foreign investment form the Philippines- remittances of proceeds of sale of assetsof non-residents in the Philippines, saleof stocks and bond holdings in domestic corporations. Capital for direct investments abroad - remittances of residents for investments in a foreign firm or enterprise to create or expand some kind of permanent interest. Portfolio investments-- remittances of residents for investments in stocks and bondsof foreignenterprises.

ONO: NATIONAL ACCOUNTS DATA LINKAGES

Loans under Deferred L/Cs deferred letters of credits. Other capital transfers named above.

amortizations

of payments

against

other capital remittances other than those