Assessing the Enterprise Risk Management and Financial Sustainability of Retail Micro and Small Enterprises in Dagupan City, Philippines

Retail micro and small enterprises (MSEs) are vital to Dagupan City’s commercial economy, yet many owner-managed firms lack formal systems for managing business risks. Philippine evidence on how such enterprises practice enterprise risk management (ERM), and what constrains systematic risk monitoring and documentation, remains limited. This study examined ERM practices, perceived financial sustainability, and implementation challenges in six retail MSEs. An explanatory sequential mixed-method multiple-case design involved six purposively selected firms. Three respondents per firm (N = 18) completed a five-point survey, followed by interviews with each firm’s owner or manager. Means summarized five ERM domains and four financial sustainability indicators, and interviews were analyzed thematically. The survey tool showed good reliability, with an internal consistency coefficient (Cronbach’s alpha) of 0.87. Survey means are pooled across respondents, so owner accounts illustrate rather than explain the ratings. Overall ERM practice was rated at a Great Extent (M = 3.47), highest in risk governance and culture (M = 3.78) and lowest in risk monitoring and reporting (M = 3.10). Perceived financial sustainability was rated at a Moderate Extent (M = 3.12), highest in growth (M = 3.40) and lowest in access to capital (M = 2.78). Interviews identified six challenges: generic support unsuitable for very small firms, limited time and staff capacity, incomplete financial records, difficulty quantifying risks, inadequate contingency reserves, and undocumented risk practices. The principal contribution is identifying an implementation gap: risk management may be practiced without systematic documentation, while incomplete financial records constrain access to capital. This study recommends low-cost monitoring routines, better financial record-keeping, and support tailored to very small enterprises.