ESA/STAT/AC.78/15

18 June 2001

UNITED NATIONS

DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS

STATISTICS DIVISION

Meeting of the Expert Group on

International Economic and

Social Classifications

New York, 18-20 June 2001

Philippine Standard Classification Systems

Margarita D. Salutan

1.       Introduction

The National Statistical Coordination Board (NSCB) serves as the policy-making  and coordinating body on statistical matters in the country.  One of the  functions of the NSCB is to develop and prescribe standard classification systems for adoption by all government agencies in order  to   ensure orderly, uniform and comparable production of statistics in the country. The development of the classification systems is patterned after existing international standard classification systems for international comparability.

At present, there are six (6) standard classification systems prescribed for adoption in the Philippines. These are: (a) 1997 Philippine  Standard Classification of Education (PSCED) based on 1976 ISCED; (b) 1996 Philippine Standard Geographic Code (PSGC); (c) 1994 Philippine Standard Industrial Classification (PSIC) based on UN ISIC Rev. 3; (d) 1993 Philippine  Standard Commodity Classification (PSCC)   based on UN SITC Rev. 3; ed) 1992 Philippine  Standard Occupational Classification based on ILO ISCO; and (f) the Philippine Classification of Commodities by Broad Economic Categories (PCCBEC) based on UN CBEC.

These standard classification systems in the country are prepared by the NSCB, in coordination with the concerned government agencies through the Technical Working Groups. These classification systems are reviewed and recommended for approval by the NSCB Technical Committee on Statistical Standards and Classifications and are prescribed for adoption and implementation by all government agencies, offices and instrumentalities through an NSCB Resolution approved by the NSCB Executive Board.

2.       Current Work on Classification Systems

The NSCB is now reviewing the amendments to the 1994  PSIC and the Philippine Central Product Classification (PCPC) based on the UN Central Product Classification (CPC) version 1.0. The amendments to the 1994 PSIC were based on the existence of emerging industries such as ICT activities, and products identified  in the PCPC which have no corresponding 1994 PSIC codes. All this will be presented to the Technical Committee on Statistical Standards and Classifications and later to the NSCB Executive Board for approval and adoption by all concerned agencies.

3.       Classification Systems Used in the 1993 SNA

The following  standard classification systems are being used in the compilation  of the national accounts of the Philippines.

3.1  Philippine Standard Industrial Classification (PSIC) - is a statistical classification of all economic activities prevailing in the country. For purposes of international comparability, this industrial classification system is patterned after the United Nations International Standard Industrial Classification (ISIC) up to 4-digit with some modifications to suit national situation and requirements  which are reflected in the 5-digit, specifically in major divisions A – Agriculture and B - Fishing.  PSIC serves as a framework for data collection, processing and compilation to secure uniformity and comparability of industrial statistics produced by various entities in both government and private sectors, including those involved in statistics and research activities and serves as basis in the construction of input-output (I-O) table in the country.

The PSIC is periodically revised  to reflect changes in economic activities, emergence of new industries, the structure of the economy and to realign with the ISIC revisions for purposes of international comparability.

The first PSIC was published in 1954  which was based on the 1948 draft of ISIC. The second was published in 1966 based on the ISIC, Revision 1. The third PSIC was published in 1977 based on the ISIC, Revision 2 and the latest edition of PSIC recommended by the NSCB for adoption by all government agencies is the 1994 PSIC based on the ISIC, Revision 3. The 1994 PSIC presents a list of the major divisions, divisions, and their corresponding number of groups, classes, and sub-classes, and a detailed classification presenting the following hierarchy of categories of industries:

17    major divisions (one-digit alphabetic codes)

63                divisions (2-digit codes)

220            groups (3-digit codes)

549            classes (4-digit codes)

1,005   sub-classes (5-digit codes)

The groups and divisions, the successively broader levels of classification, combine the statistical units according to the character, technology, organization and financing of production. The PSIC is widely used  in the country, in classifying data according to the kind of economic activity in the fields of population, production, employment, gross domestic product, in the construction of input-output (I-O) table; and for anticipating the emergence of new industries in the country.  PSIC is also used for the compilation of statistics in the System of National Accounts (1993 SNA).

3.2   Philippine Standard Commodity Classification (PSCC) - is a detailed classification of all commodities that enter the Philippine trade. It is patterned closely after the UN Standard International Trade Classification (SITC) Rev.3 up to 5-digit with modifications to suit national conditions which are reflected in 7-digits. The PSCC also shows the interrelationship with the Tariff and Customs Code of the Philippines as amended which is also known as the Harmonized Commodity Description and Coding System. The 1993 Revision 2 with amendments  in 1999 is the latest edition of the PSCC. It is used  for compiling international  trade statistics on all merchandise entering Philippine trade and to promote international comparability of those statistics.  Current plans are to maintain an  integrated PSCC and HS, updating it to correspond with the changes that are being made to HS for 2002.

In response to the need for a standard classification for the purpose of preparing statistical information on the distribution of various commodities that enter foreign as well as  domestic trade, the National Economic Council (NSC), in 1960 issued the first commodity classification entitled “Standard Commodity Classification  of the Philippines” (SCCP). This scheme was patterned mainly after the 1950 UN Standard International Trade Classification (SITC) with modifications made, however, to suit local situations and requirements. Other classification schemes integrated in the preparation of the SCCP were the 1957 Tariff and Customs Code of the Philippines (TCCP), the Central Bank Statistical Commodity Classifications (CBSCC), and the standard list of the Fiber Inspection Board . It is to be noted that the cited schemes were also based on international versions, with modifications made to suit national requirements.

Changes in technology and trade patterns have made the commodity classification designs inadequate  to the needs of users. Thus, the 1950 UN SITC was amended in 1960 (SITC, Rev.) and again in 1972 (SITC, Rev.2). The 1955 Brussels Tariff Nomenclature (BTN) was  amended in 1972 and 1975. The 1957 TCCP was likewise revised in 1972. The 1977 PSCC was issued by the NEDA which was amended and reprinted in 1983.The PSCC revised was issued in 1989 by the NSCB. The PSCC Revised 2 is an update of the PSCC Revised. It is aligned with the UN SITC, Rev.3 as amended and the Tariff and Customs Code of the Philippines, as amended (also known as Harmonized Commodity Description and Coding System (HS).  NSCB Board Resolution  No. 9-93, series of 1993 prescribed the adoption of the PSCC, Revision 2 to all concerned government agencies and NSCB Board Resolution No. 12, series of 1997 approving the Amendments to the PSCC, Revision 2.

3.3   Philippine Central Product Classification - is a standard classification of goods and services including tangible and intangible assets based on their physical properties and intrinsic nature of the products. It is a standard classification that will provide a link between product and industry or economic activity. The expression “physical properties and intrinsic nature” means criteria that are proper to the goods themselves, e.g., the raw materials of which they are made, their stage of production, the way in which they are produced, the purpose or user category for which they are intended, the prices at which they are sold, whether or not they can be stored, etc.

The PCPC provides a framework in the compilation and presentation of production and trade data on goods and services by industrial origin. It is an instrument  for assembling and tabulating all kinds of statistics that needed product detail. Such statistics may cover production, industrial statistics, national accounts, price statistics, intermediate and final consumption, capital formation and foreign trade and may refer to commodity flows, stocks or balances and may be compiled in the context of input-output tables, balance-of-payments and other analytical presentations. The PCPC has 10 sections and 99 divisions.

PCPC also provides a link with HS and PSCC. For the section of the PCPC dealing with transportable goods (Divisions 0-4), each subclass of PCPC corresponds to one or more HS headings or subheadings. It can also be noted that any five-digit item of PSCC is wholly contained within a single PCPC subclass. Harmonized Commodity Description and Coding System (HS)  is a multi-purpose goods nomenclature used as the basis for customs tariffs and trade nomenclature all over the world. It has wide acceptance  and is the predominant classification used in the compilation of statistics of foreign trade, because of its acceptance by customs organizations.

4.       Future  Plans

In the next few months , the NSCB will develop the classification of expenditures according to purpose to fully address the requirement of the 1993 SNA. There are four classification systems included in the 1993 SNA, as follows: Classification of the Functions of the Government (COFOG), Classification of Individual Consumption According to Purpose (COICOP), Classification of the Purposes of Non-Profit Institutions Serving Households (COPNI), and Classification of the Outlays of Producers According to Purpose (COPP).