Working capital management practices of MSMEs in Samar, Philippines towards triple bottom line sustainability

Business practices are crucial for the success and sustainability of micro, small, and medium enterprises (MSMEs). Effective business management, including working capital management, helps MSMEs maintain liquidity, support growth, and navigate financial challenges. Proper allocation of resources, such as cash flow management, access to funding, inventory, and financial planning, ensures that MSMEs can meet day-to-day operational costs and capitalize on opportunities for expansion. This paper analyzed the working capital management practices of MSMEs in Samar, Philippines and how this can be linked to their economical, social, and environmental sustainability as a local business. Business owners (n=388) from Samar, Philippines were purposively sampled to participate in the study. Findings indicated low sustainability among MSMEs in Samar, Philippines, highlighting the lack of focus on economic, social, and environmental sustainability, with businesses showing poor performance in all three dimensions of the Triple Bottom Line (TBL). Likewise, their financial performance for cash management and inventory management was underwhelming. Despite the potential for working capital management to improve sustainability, MSMEs in Samar struggle with effective implementation. Nevertheless, this paper emphasized the disparity between MSMEs and larger corporations in terms of sustainability practices and calls for increased awareness and strategic efforts to integrate working capital management and sustainability into MSMEs’ operations, particularly in sectors like agriculture, trade, and food services.