BSP Constructs the 2017 Philippine Financial Social Accounting Matrix
The BSP has constructed the Philippine Financial Social Accounting Matrix for 2017 (PFSAM 2017), which provides an overview of the real and financial transactions in the Philippine economy in 2017.
The main objective of PFSAM is to connect the multi-industrial relationships in production to the multi-sectoral distribution of income, consumption, investment in produced and non-produced assets and financial instruments and the interlinkages between the domestic institutions and, in turn, these institutions with the Rest of the World (ROW).
The PFSAM 2017 was compiled based on the comprehensive conceptual and accounting framework of the United Nations’ System of National Accounts, 2008 (2008 SNA). It is built from supply and use tables (SUT) as one of the major structural blocks of economic data which serve as tools for economic analyses. The SUT provides the basic structure for deriving more detailed input-output (I-O) table.
The PFSAM 2017 provides a comprehensive database and can be used to assess the performance of the economy. The PFSAM helps analyze the structural roles and relative importance of not only the industries but also the institutional economic decision makers such as corporations, government and households (HHs), with respect to their contribution to Gross Domestic Product (GDP), gross capital formation, final consumption and their financial transactions.
It helps identify, for instance, the sources of income by type and their relative importance to each institutional sector in the economy. It also shows the behaviors of institutional sectors in the use of their disposable income (either for final consumption, saving or capital formation) and the financing of any deficit through incurrence of liabilities or disposal of financial assets.
Major findings of PFSAM 2017
About 90.4 percent of the total supply (domestic production and imports) was absorbed by domestic institutions for their production activities, final consumption and capital formation. Almost all outputs of electricity, gas and water; construction; public administration and defense; financial intermediation services; agriculture, hunting, forestry and fishing were consumed domestically.
Household final consumption expenditure was the highest contributor to GDP at 75.1 percent. The household sector had the largest share of the GNI with its balance of primary incomes at 71 percent of the total GNI. The household sector, which also had the largest net current transfers received, remained as the sector with the highest level of disposable income among the domestic institutions. Almost 92 percent of HHs’ income came from compensation income (44.1 percent); mixed income (35.6 percent); and transfers (12.2 percent). A large share of household income was spent on consumption (87.5 percent). The Non-financial Corporations (NFCs) was the next highest contributor to GNI, with 18.3 percent share.
The NFCs sector was the largest saver in the economy followed by the HH sector. Thus, the NFCs financed their investment demand (also the highest) mainly with their savings (66.3 percent) and liabilities (33.7 percent), largely in the form of loans and equities.
Overall, the domestic economy was in a net borrowing position with the ROW. All sectors were net borrowers, except for the financial corporations sector. The combined net borrowing of the three (3) sectors outweighed the upturn in the financial corporations sector’s net lending. This development mirrored the further deterioration of the country’s current account balance due to the higher trade-in-goods deficit.
The structure of the economy is basically similar both in the 2010 and 2017 PFSAM. However, the domestic economy was in a net borrowing position in 2017, while in 2010, it was net lender with the rest of the world. This was reflective of the country’s the current account position of the country, which turned into deficit in 2017 from a surplus in 2010.