E. Country experiences (Chapter 11)
11.33. For compiling statistics on the international supply of services, most countries face the challenge of having to rely on several sources with different coverage. The data collection is often done in a context of scarce resources and the necessity of limiting response burden. Therefore, compilers need to make best possible use of available sources. The following examples illustrate some country practices for dealing with the challenge of having to use different data sources and compare their characteristics in order to collect relevant information.
Country experience: Canada
11.34. For the majority of statistics on services transactions, apart from travel and transport services, Canada uses a specific survey on trade in services and several industry-oriented surveys. Those enterprise/establishment surveys are supplemented by administrative data that record non-arm’s-length transactions with non-residents. Each source has its own coverage and its own collection of services statistics that are not necessarily equivalent to those of EBOPS. However, as resources are limited and the reduction of response burden is an important objective for Canadian compilers, it is necessary to use several sources to produce the best possible estimates.
11.35. The industry-oriented surveys of Canada collect different information on revenues and expenses by enterprises/establishments for specific industries. Those surveys offer broad coverage of the services industries, but the level of detail of the collected information is limited. Such surveys are, therefore, complemented by the international transactions on commercial services survey (BP21S) that targets 3,500 enterprises and collects information for 32 categories of services. Transactions are reported by country of trade as well as whether there is a relationship with the trade partners. The accompanying explanatory notes should, in principle, improve the quality of the responses.
11.36. Compared with enterprise/establishment surveys, administrative data provide, in principle, better coverage, as all Canadian legal entities are required to fill out the tax form if their total transactions (not only in services) with their foreign related entities are above Can$1 million. For example, for the year 2010, more than 12,000 entities filled the tax form, and half of them reported service transactions. The tax form supplies transactions by name and country of the non-resident entities.
11.37. However, the tax form is limited to transactions with foreign-related parties. That limitation virtually eliminates Statistics Canada’s capacity to use the administrative information as a data replacement source. In other words, the administrative data could not completely replace survey data. Furthermore, several service categories are aggregated on the form to simplify the work of the respondents. The tax form contains few definitions, which may lead to errors or misinterpretation by the respondents.
11.38. The annual administrative data files are updated twice a year. As they are an external source, less quality control may be applied on the information they contain. For example, if no transaction is reported for a certain entity, the reason could be the absence of a transaction, but it could also be that the transaction has not yet been processed. Monitoring transactions in services is not the main purpose of the tax form. Thus, verifications by tax authorities are usually done at a more aggregated level, possibly resulting in transactions for the same unit being reported under one activity in one year and under another activity the following year, without further verification.
11.39. More information on the industry-oriented surveys of Canada and the more specific international transaction in commercial services survey is provided online.
Country experience: Japan
11.40. Japan uses an ITRS as a primary data source for compiling trade in services. However, as some transactions cannot be captured through an ITRS, various data sources have been implemented to supplement it. Other data sources include enterprise surveys for specific business based on the Foreign Exchange and Foreign Trade Act, administrative sources and data provided by private institutions. Uses of data sources other than the ITRS for the compilation of trade in services are summarized in table 11.9. More detail on the experience of Japan is given in the online version of the present Guide.
Table 11.9 Japan: sources of trade in service items
ITRS, International transportation survey (ITS)
ITRS, ITS, trade statistics, other sources
ITRS, ITS, trade statistics, other sources
Border surveys, administrative sources (AS), ITRS, other sources
Household surveys, AS, ITRS, other sources
ITRS, survey ordered by written notification
Maintenance and repair services
Insurance and pension services
ITRS, survey on freight insurance, other sources
ITRS, survey on freight insurance, trade statistics, other sources
Charges for use of intellectual property
Telecommunications, computer and information services
Other business services
Government goods and services n.i.e.
AS, ITRS, ITS
AS, ITRS, ITS
Country experience: Philippines
11.41. Bangko Sentral ng Pilipinas (BSP) is the lead agency in the compilation of statistics on the international supply of services in the Philippines. BSP is able to compile all the main services accounts, mostly from the bank reports in the ITRS, supported by the company responses to the cross-border transactions surveys (CBTS) and administrative reports from other agencies and industry associations.
11.42. The main challenge for BSP in the compilation of statistics on the international supply of services is maximizing the benefits of the ITRS and CBTS. On the one hand, the challenge of BSP in the use of an ITRS is addressing possible misclassification of transactions by banks. On the other hand, BSP is confronted with the challenge of improving the generally low response rate and the coverage of CBTS to include other industries, to better capture relevant international services transactions. The low response rate of surveys stems from the absence of a specific provision in the charter of BSP that would allow it to enforce compliance by non-financial corporations to provide data or information.
11.43. Reports submitted to BSP by commercial, thrift and foreign banks under ITRS contain information on bank positions in foreign currency-denominated assets and liabilities and all payments and receipts that bring about changes in the banks’ positions. That information is being used in the compilation of some services sub-items, such as transport, travel, construction, insurance and pension, financial (including FISIM), charges for the use of intellectual property n.i.e., telecommunications, computer and information services, other business services and personal, cultural and recreational services.
11.44. In addition to the monthly CBTS, BSP, in coordination with the department of trade and industry (DTI) also conducts the annual information technology-business process outsourcing (IT-BPO) services survey that covers companies engaged in business process outsourcing (BPO) activities.
11.45. BSP also uses administrative data provided by regulatory and administrative government agencies, such as customs data, to compile some of the services sub-accounts, including manufacturing services of the physical inputs owned by others, freight import and exports, insurance etc.). The department of foreign affairs (DFA) data on the annual budgets of Philippine embassies and consular offices abroad are used as approximations for payments on government goods and services n.i.e.
11.46. For non-resident expenditure in the Philippines (travel receipts), data are derived from the visitors sample survey (VSS) conducted by the Department of Tourism (DOT), which provides information on the average expenditure of foreign tourists and their average length of stay in the Philippines. For tourist-related travel expenditure abroad by residents, data are sourced from the ITRS and CBTS. Beginning with the 1999 report, travel receipts include the expenditure of non-resident overseas Filipinos (OF) in the Philippines during home visits. Travel debits cover expenditures of resident OFs in the host countries in which they are deployed. Information on residents’ credit card expenditures abroad are obtained via reports of the Credit Card Association of the Philippines.
 The reason for this is that, in line with BPM6 recommendations (para 10.78), all freight costs up to the customs frontier of the economy of the exporter are shown as incurred by the exporter and all freight costs beyond the customs frontier of the exporter are shown as incurred by the importer (see chapter 14 and BPM6 Compilation Guide, para. 12.35).
 Excluding manufacturing, government goods and services n.i.e., transport services, and travel.