Economic reasons are a significant factor why microentrepreneurs remain in flood-prone areas

23 Sep 2025

The number of establishments (89% of the total establishments in the Philippines) and people employed by micro enterprises makes it apparent that preparing for natural disasters has become a minimum requirement to ensure continuity of operations and survival. The sustainability of these microenterprises also affects the very fabric of society. For instance, the survival of a family remarkably depends on the profitability and employment these establishments offer.

Despite the impact of urban flooding on businesses, the choice of microentrepreneurs to stay in flood hazard areas runs counterintuitive to the principles of profitability and sustainability. While existing literature provides substantial knowledge on the factors affecting an entrepreneur’s choice of operating location, it does not go deeper into why entrepreneurs decide to remain and operate in frequently flooded urban areas. Since these enterprises significantly contribute to the country’s economy, their continued presence in flood-prone areas merits attention, especially considering how climate change is putting the country at a higher level of risks with the increasing frequency and worsening intensity of extreme weather events.

A multi-stage cluster sampling technique was used in this study to establish an adequate representation of microentrepreneurs in flood-prone areas of Marikina City. Using various statistical tools, the research revealed that component factors such as economic considerations, the microentrepreneur’s socio-spatial relations, and experiences and perceptions of resilience influence the decision to remain in urban flood-prone areas. Moreover, specific sub-factors under each component factor were identified, which can be grouped into ‘pre-existing’ and ‘learned’ categories, introducing a new location decision model attuned to the dynamics that exist between microentrepreneurs and a natural disaster such as urban flooding.

The study’s findings can help guide policymakers and urban planners in designing targeted intervention measures that translate to more micro-enterprise-responsive disaster risk reduction and management plans. Moreover, by treating microenterprises as separate from the traditional occupations, communities might appreciate the crafting of local land use plans, which would successfully improve the overall resilience of this sector in urban flood-prone areas.

Authors: Reynold Ferdinand G. Manegdeg (Institute for Small-Scale Industries, UP Diliman), Jose M. Regunay (School of Urban and Regional Planning, UP Diliman) and Dina C. Magnaye (School of Urban and Regional Planning, UP Diliman)

Read the full paper: https://journals.sagepub.com/doi/abs/10.1177/09754253241278773

Economic reasons are a significant factor why microentrepreneurs remain in flood-prone areas

The number of establishments (89% of the total establishments in the Philippines) and people employed by micro enterprises makes it apparent that preparing for natural disasters has become a minimum requirement to ensure continuity of operations and survival. The sustainability of these microenterprises also affects the very fabric of society. For instance, the survival of a family remarkably depends on the profitability and employment these establishments offer.

Despite the impact of urban flooding on businesses, the choice of microentrepreneurs to stay in flood hazard areas runs counterintuitive to the principles of profitability and sustainability. While existing literature provides substantial knowledge on the factors affecting an entrepreneur’s choice of operating location, it does not go deeper into why entrepreneurs decide to remain and operate in frequently flooded urban areas. Since these enterprises significantly contribute to the country’s economy, their continued presence in flood-prone areas merits attention, especially considering how climate change is putting the country at a higher level of risks with the increasing frequency and worsening intensity of extreme weather events.

A multi-stage cluster sampling technique was used in this study to establish an adequate representation of microentrepreneurs in flood-prone areas of Marikina City. Using various statistical tools, the research revealed that component factors such as economic considerations, the microentrepreneur’s socio-spatial relations, and experiences and perceptions of resilience influence the decision to remain in urban flood-prone areas. Moreover, specific sub-factors under each component factor were identified, which can be grouped into ‘pre-existing’ and ‘learned’ categories, introducing a new location decision model attuned to the dynamics that exist between microentrepreneurs and a natural disaster such as urban flooding.

The study’s findings can help guide policymakers and urban planners in designing targeted intervention measures that translate to more micro-enterprise-responsive disaster risk reduction and management plans. Moreover, by treating microenterprises as separate from the traditional occupations, communities might appreciate the crafting of local land use plans, which would successfully improve the overall resilience of this sector in urban flood-prone areas.

Authors: Reynold Ferdinand G. Manegdeg (Institute for Small-Scale Industries, UP Diliman), Jose M. Regunay (School of Urban and Regional Planning, UP Diliman) and Dina C. Magnaye (School of Urban and Regional Planning, UP Diliman)

Read the full paper: https://journals.sagepub.com/doi/abs/10.1177/09754253241278773