Philippine Journal of Science

151 (6A): 2191-2202, December 2022

ISSN 0031 - 7683
Date Received: 15 Mar 2022

Street Vendors’ Livelihood Vulnerability

to Typhoons in Naga City, Philippines

Hanilyn A. Hidalgo1*, Michael A. Cuesta2, and Bam H.N. Razafindrabe3

1Department of Agribusiness, Central Bicol State University of Agriculture,

Pili, Camarines Sur 4418 Philippines
2Graduate School, Ateneo de Naga University,
Naga City, Camarines Sur 4400 Philippines
3Faculty of Agriculture, University of the Ryukyus,
1 Senbaru, Nishihara, Okinawa 903-0213 Japan

Street vendors belong to the informal business sector operating outside the legal frameworks.
With little or no access to social protection, they are perceived to be vulnerable to the adverse
effects of a crisis or shocks like typhoons. This study assessed the livelihood vulnerability
of street food vendors in an urban city in the Philippines by modifying Hahn's livelihood
vulnerability model and the IPCC formula to construct a composite index for exposure,
sensitivity, and adaptive capacity. Using the data obtained from the randomized survey of
100 street food vendors, principal component analysis revealed 10 latent variables related to
livelihood vulnerability. These variables are business networks, business experience, human
capital, financial capital, livelihood utilities, physical well-being, business risk management,
physical damages, business losses, and shelter type. The index scores for each variable show that
shelter type, business losses, business risk management, and financial capital are the leading
factors of livelihood vulnerability among street food vendors; business network is the least.
The overall vulnerability of the sector was found to be at a moderate level. One of the sector's
major strengths is having social ties manifested through daily interactions and direct connections
with their clients. The study offers a framework for measuring the vulnerability of the informal
business sector to climate hazards that is context-specific and multifaceted, encompassing
adaptive capacity, sensitivity, and exposure – distinctly integrating an entrepreneurial context
indicative of business continuity as a livelihood vulnerability-reducing strategy.

Keywords: business indicators, livelihood vulnerability, street vendors, typhoon

INTRODUCTION al. 2013). Entrepreneurs that operate informal businesses,

Entrepreneurship plays a vital role in creating and
sustaining economic growth. Policy debates recognize
small businesses as an important sector for growth and
employment (Minniti 2013). However, not all businesses
operate in a formal economy. At least half of the businesses
worldwide are unregistered – so-called "informal" (Acs et
*Corresponding author: hanilyn77@gmail.com
such as street vendors, comprise the shadow economy,
wherein they produce and sell legal goods and services
outside the legal framework and requirements set by the
government (Bruton et al. 2012). The state of public affairs
and the economy influence the growth of the informal
sector. Economic progress could increase the cost of doing
business, such as wages. In this kind of environment,
the legitimacy of government, good governance,

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Vol. 151 No. 6A, December 2022
accountability, and efficient regulatory frameworks
stimulate the formal sector to flourish (Thai and Turkina
2014). Otherwise, it encourages the de-formalization of
businesses as a form of protest. Conversely, Williams
et al. (2016) believe informality largely depends on the
attributes of the entrepreneur or the enterprise and not
their motives or institutional compliance.
The informal food sector, particularly street food vendors,
plays a vital role in food production and distribution that
spans the entire food value chain – providing employment,
income, and food security, especially among low-income
families (Simon 2007). In the Philippines, out of the 40.7
million people who are employed, 33 million are in the
informal sector (Cecilia 2018). The informal sector also
accounts for 43% of the gross domestic product. Thus, the
government regards the informal sector as a valuable local
development partner (Ballano 2016; Vo and Ly 2014).
At the same time, however, it is also a cause for concern
since this means that – being in the informal economy – a
huge portion of workers do not have the protection of the
law. Because they have little to no social protection, they
are highly vulnerable to the adverse effects of a crisis or
shock, such as those caused by climate-related hazards or
extremes (ILO 2022).
Unlike their non-food-related counterparts, street
food vendors are highly vulnerable to climate-related
hazards such as drought, typhoons, and flooding (Brata
2010). These climate-related hazards severely affect the
agriculture sector and, consequently, those in the informal
food sector that depend on them (Jamil 2013). As a result,
street food vendors experience economic displacement,
making them at risk of falling into permanent or transitional
poverty. The increasing frequency and severity of climate
hazards have already resulted in disasters, the enormous
cost of which impedes achieving sustainable development
(IPU 2010; IPCC 2014, 2022). This is crucial as climate-
related disasters are increasingly becoming more of a local
phenomenon (Pal et al. 2021). Historically, typhoons and
flooding have disrupted formal business establishments
and the informal business sector (IPCC 2022).
While the informal food sector continues to thrive in many
parts of the world, supporting diverse groups of people
and contributing to poverty reduction, it is increasingly
undermined by the adverse effects of typhoons, which
have become more frequent and severe. Moreover, it
often finds itself neglected and left out in policymaking
(Meagher 2013). This reality is becoming more of local
concern, particularly in Naga City. Without vulnerability-
reducing measures, this trend will further marginalize the
sector by hindering their desire to achieve sustainable
livelihoods. The study addressed this concern by
developing a framework for assessing the vulnerability of
the city's informal food sector to typhoons and identifying
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critical areas for vulnerability-reducing interventions.
In the context of disaster risk reduction, vulnerability is
“the characteristics and circumstances of a community,
system or asset that make it susceptible to the damaging
effects of a hazard” (UNDRR n/d). Vulnerability to climate
change is defined as a system's degree of susceptibility to,
or inability to cope with, the adverse effects of climate
hazards (IPCC 2007; FAO 2008; Etwire et al. 2013). In
literature, the key parameters of vulnerability are the
stress to which a system is exposed, its sensitivity, and its
adaptive capacity (Adger 2006). Hence, vulnerability is a
multi-faceted and context-specific concept (Hinkel 2011).
Many studies have highlighted the significance of certain
aspects of vulnerability as primarily a social construct.
Thomas et al. (2019) and Barnett (2020) showed the
predominant role of social, political, and economic factors
in affecting adaptive capacity and, in turn, vulnerability.
Other studies emphasized the significance of social capital
(Eriksen and Lind 2009; Williams and Nadin 2012),
especially community-level social networks and structures
(See and Porio 2015).
Ribot (2014) provides another pathway of vulnerability
by attributing it to access to assets and social protection.
Street vendors belong to an ostensibly marginalized
informal sector characterized by high social and
livelihood insecurity (Recio and Gomez 2013; Boels
2014). In the government's effort to assist the sector, a
better understanding of why they choose to remain in the
informal sector and how they cope with the compounding
effects of climate change-related hazards is crucial to
inform and facilitate vulnerability-reducing policies
and interventions. Incorporating sectoral practices and
perspectives would allow the government to avoid
or minimize resistance and the risk of implementing
"maladaptive" interventions (Farbotko and Lazrus 2012).
Vulnerability is based upon the interactions of three
components: exposure of a system, its sensitivity, and
its adaptive capacity (IPCC 2007). Since vulnerability
to climate change is primarily based on exposure and
sensitivity, a higher adaptive capacity helps lessen the
effects of exposure, thus reducing vulnerability (Thomas
et al. 2019). In this study, adaptive capacity refers to the
ability of the system to adjust or endure extreme climate
effects, sensitivity refers to the degree to which the system
is affected, and exposure is the extent of impact brought
by climate extremes such as storms and drought (Hahn
et al. 2009). Adaptive capacity has been described using
household socio-demographic characteristics (Hahn et al.
2009; Zafar and Khan 2013; Can et al. 2013), livelihood
strategies (Hahn et al. 2009; Marschke and Berkes 2006;
Crawford and Seidel 2013; Staniewski 2016), and social
networks (Hahn et al. 2009; Can et al. 2013; Asgary et al.
Philippine Journal of Science
Vol. 151 No. 6A, December 2022
2013) because these attributes reflect the ability to adjust
to climate extremes. Previous studies also found that
health security (Hahn et al. 2009), food security (Leyna
et al. 2008), and access to utilities (Hahn et al. 2009; Shah
et al. 2013; Simane et al. 2014) are significant indicators
of sensitivity, the absence of which aggravates the impact
of climate-related stress on livelihood systems. On the
other hand, the level of exposure has been inferred from
the household's firsthand experience of a disaster – such
as the duration of power outage (Hahn et al. 2009; Shah
et al. 2013), experience of illness, injuries, or death in
the household (Crawford and Seidel 2013), and loss of
income and productive and household assets (Can et al.
2013) since they manifest direct impact caused by climate
extremes. Alternatively, vulnerability was calculated
by Can et al. (2013) using the five livelihood capitals:
financial, physical, natural, human, and social factors.
Subsequently, these two frameworks were combined by
Lamichhane (2010) to quantify vulnerability.
The study was built upon the livelihood vulnerability
index (LVI) of Hahn et al. (2009) on two key points. First,
the variables that capture adaptive capacity are primarily
shaped by the locals' livelihood strategies and experiences,
showing their applicability to various livelihood sectors
in evaluating the relative vulnerability to climate change
in the urban ecosystem, such as Naga City. Second, the
LVI uses primary data indicators at the household level,
which considers the current livelihood vulnerability and is
Figure 1. Naga City flood hazard map from the Institute for Environmental Conservation and Research.
Hidalgo et al.: Street Vendors’ Livelihood Vulnerability
to Typhoons in Naga City, Philippines
helpful in local planning. The macroeconomic indicators
used in some vulnerability assessments may not reflect
the actual condition of the specific sector being studied
(Shah et al. 2013; Etwire et al. 2013). The informal
business sector's livelihood vulnerability in a Philippine
urban city appears to have received little attention. Hence,
using empirical data that the sellers directly witnessed, the
current study seeks to determine the level of vulnerability
of the street vendors.
METHODOLOGY
Study Site
The study was conducted in Naga City, which is considered
the central business district in the province of Camarines
Sur. According to the Metro Naga Chamber of Commerce
and Industry, the informal sector accounts for about 46%
of the businesses operating in the city. Because of the
City's geographical location, it is susceptible to climate
extremes such as typhoons and flooding (Figure 1).
Naga is situated along the usual east-to-northwest path of
typhoons and is ranked as the 10th most disaster-prone
city in the world (ACFC 2016). The ranking considered
the combined risks of typhoons, floods, earthquakes,
storm surges, volcanic eruptions, and landslides. In the
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last 10 years (2011–2021), 15 typhoons hit Naga City,
severely damaging houses and disrupting power supply
and communication. The severe damage or loss to crops
consequently resulted in high agricultural commodities.
Because of its proximity to the Bicol River, the typhoons
that hit the city are usually accompanied by flooding
– adversely affecting major road networks, schools,
commercial buildings, and medical facilities.
Data Collection
The study used four data gathering techniques: focus group
discussion (FGD), survey, secondary data collection, and
key informant interview. The study conducted one FGD
involving six selected participants who are stakeholders of
the informal food sector in Naga City. The group included
leaders of the informal businesses identified by the city
market office based on their personal knowledge of the
issues pertaining to the informal food sector.
Primary data collection was conducted from mid-
2017 to mid-2018. The survey involved face-to-face
interviews with 100 randomly selected respondents. The
respondents were limited to unregistered, micro food
enterprise operators who mainly sell raw or cooked food
items directly to consumers in the city. As vulnerability
is context-specific, the study's results cannot be
generalized to represent the conditions in other areas or
sectors. Moreover, the study only addressed the sector's
vulnerability to typhoons since they are known to be the
most dangerous hazard affecting in the region. Particularly,
the study used the latest and strongest typhoon event (i.e.
Tropical Storm Nina) as a uniform point of reference.
Hence, the results may not depict the sector's vulnerability
or coping capacity to other natural or man-made hazards,
such as earthquakes or financial crises.
The sample size of 100 is projectable to the total
population being studied, with the maximum variability at
p = 0.5, the margin of error of 10%, and a confidence level
of 95%. The respondents were chosen using systematic
sampling with a random start. This sampling design is also
used in several market studies (Roberto 1987). For factor
analysis, Gorsuch (1983) recommended five subjects per
item with a minimum of 100 subjects. However, recent
studies found this to be too small (Comrey and Lee 1992).
Hence, the results may be considered preliminary and
could be validated as more sample cases become available.
Data Analysis
The study used quantitative methods to analyze the
vulnerability level. To suit the informal food sector’s
livelihood system, it modified the LVI developed by
Hahn et al. (2009), which involves the computation
of a composite index score to indicate the adaptive
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capacity, sensitivity, exposure, and – consequently – the
vulnerability of the informal food sector to climate-
related extremes. The composite index score was based
on the households’ socio-demographic characteristics,
livelihood strategies, social networks, access to health,
food security, access to utilities, and disaster experience.
The indicators for each component were grounded on
various vulnerability and business resiliency studies and
were modified to fit the business context. A total of 30
variables were used to describe the livelihood vulnerability
of the sector (Hidalgo and Cuesta 2018).
To analyze this data, the study used principal component
analysis (PCA). The LVI was calculated using the SPSS-
PCA component scores matrix to separately generate a
component scores matrix for adaptive capacity, sensitivity,
and exposure. The scores in the matrix are the indices
for each variable under each component. To obtain the
index for each major component, the absolute mean of
the variable indices was computed using the principle
of LVI (Hahn et al. 2009). The component indices were
then multiplied by the ratio of the factor loadings of
each corresponding component. The ratio of the factor
loadings refers to the proportion of the explained variance
for the component to the total explained variance, which
represents the weight of the corresponding component.
In the IPCC framework, LVI (denoted as LVI_IPCC) is
computed from three significant factors of vulnerability –
adaptive capacity (AC), sensitivity (SEN), and exposure
(EXP) – shown as follows:
𝐿𝑉𝐼_𝐼𝑃𝐶𝐶 = (𝐸𝑋𝑃 − 𝐴𝐶) � 𝑆𝐸𝑁 (1)
The indicators for adaptive capacity are negatively
oriented such that high indicator scores would mean low
adaptive capacity and, thus, a high level of vulnerability.
The PCA-generated scores served as the indices of
vulnerability and were interpreted using a five-point
scale level of 0–1. The overall LVI_IPCC ranges from –1
to 1, categorized into five levels, with 1 being the most
vulnerable.
To check the appropriateness of PCA, Kaiser-Meyer-
Olkin (KMO) and Bartlett's test of sphericity (BTS) were
used. KMO measures sampling adequacy. The values of
KMO vary between 0–1. Values closer to 1 are better,
and the value of 0.5 is the suggested minimum (Kaiser
1974). Concurrently, BTS determines the sufficiency
of correlations being combined into a component. The
significance level value of less than 0.05 would indicate
that the PCA is valid for the data. The data used in this
study generated KMO values of more than 0.5 and BTS
values of less than 0.05, indicating sampling adequacy
and suitability of the data for further analysis using PCA.
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RESULTS AND DISCUSSION
The informal food sector in Naga is predominantly (89%)
run by women with an average age of 42. Most (45%) only
had an elementary education, which may partially explain
why 79% of the respondents claimed that engaging in the
informal food business is mainly borne out of necessity
to earn a living rather than an opportunity.
Adaptive Capacity
The components for adaptive capacity were generated
through PCA. Consequently, four components accounted
for 62% of the variability in adaptive capacity. These
components are business networks, business experience,
human capital, and financial capital. Each of the four
components was labeled distinctively based on the nature
and structure of the variables found to load on these
components. In this study, a variable is said to load on
a given component if the variable loading was 0.50 or
higher. Using this criterion, four variables were found
to load on the first component – labeled as "business
network" (Table 1) – because the variables are associated
with sets of individuals or groups that support their
livelihoods. Three variables were found to load on the
second component, called "business experience." The
variables under this component denote length and skill in
running a business. In the context of gender, women have
better social skills than men (Cortes et al. 2018).
Moreover, two variables loaded on the third component are
referred to as "human capital" as they express competency
and human reliance, while two other variables loaded
Table 1. The rotated component matrix for adaptive capacity.
Variables Business
network
Number of suppliers 0.773
Social network 0.814
Sales patronage 0.530
Livelihood assistance difficulty –0.613
Gender
Age of business
Commodity diversification
Skills diversification
Dependency ratio
Savings insufficiency
Credit disposition
Rotation sum of squared loadings
% of variance 18.644
Cumulative % 18.644
Hidalgo et al.: Street Vendors’ Livelihood Vulnerability
to Typhoons in Naga City, Philippines
on the fourth component are labeled "financial capital,"
which signifies monetary resources such as savings and
credit. The PCA revealed four factors accounting for 62%
of the variance in adaptive capacity: business networks,
business experience, human capital, and financial capital.
This means that the variation in the level of adaptive
capacity and – by extension – vulnerability is moderately
associated with this set of factors.
The index score generated by the PCA was on a 0–1
scale. The absolute value of the score was used to
interpret the data. A higher index score indicates a lower
adaptive capacity, thus contributing to a higher level of
vulnerability. Among the variables in Table 1, savings
insufficiency shows the highest index. This means that
it is a significant source of low adaptive capacity in the
sector. The results of the FGD revealed that many would
find it difficult to set aside a portion of their income for
capital build-up. The average monthly income of informal
food businesses was PHP 17,106. Based on the survey, the
majority (72%) have difficulty saving. In business, savings
are supposedly used to improve an enterprise (Dupas and
Robinson 2013).
However, a portion of their earnings is spent on vices like
cockfighting and binge drinking, as well as other luxury
items like new models of television and gadgets such as
smartphones. Because of this, they are forced to borrow
from informal lenders, even under lending schemes
requiring high interests and daily loan payments. Street
vendors are often targeted by informal lenders since they
earn income on a daily basis. Informal lenders also require
very minimal documentation for one to obtain a loan,
Business Human capital Financial capital Index scores
experience
0.475
0.398
0.194
–0.298
0.833 0.566
0.608 0.357
–0.591 0.355
0.708 0.45
–0.746 –0.457
0.799 0.572
–0.716 –0.488
14.717 14.648 13.885
33.361 48.009 61.894
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making borrowing easy. Because of this, street vendors
become more susceptible to high-interest borrowings
with a high risk of default. This is why credit disposition
negatively affects low adaptive capacity. The financial
stress brought by this scheme contributes to reducing
adaptive capacity. More so, the loans they get are not even
used for productive activities, thus making them more
vulnerable. This finding corroborated with the study of
Hahn et al. (2009), indicating that more borrowings mean
more vulnerability.
Sales patronage posted the lowest index score. This
variable, which falls under the business network
component, dramatically contributes to increasing
the adaptive capacity of the sector, thus reducing the
livelihood vulnerability. The ability of the informal food
businesses to access livelihood resources is developed
through social bonds with those who have the resources
they need. Social bonds can be in the form of friendship,
trust, reciprocity, patronage, dependence, or obligation
as continuous negotiation processes (Kawarazuka et al.
2017). Street retailing has enabled them to strengthen
their interactions and connections with buyers and
other retailers (Fellows and Hilmi 2011). This suggests
that sales patronage could be developed through social
relations and skills, which in turn could benefit their
businesses by, for instance, networking with suppliers
and competitors. Thus, the street vendors (89%) no
longer avail of livelihood assistance from external
sources because they do not need it, as indicated by the
negative association of livelihood assistance difficulty
with adaptive capacity.
The findings of Shah et al. (2013) and Tewari and
Bhowmick (2014) support the result of this study, wherein
the highest source of adaptive capacity was found in social
networks. The informal sellers from both rural and urban
settings operate based on social interactions rather than
economic activities (Kawarazuka et al. 2017). This may be
Table 2. Rotated component matrix for sensitivity.
Variables Livelihood utilities
well-being
Water supply –0.655
Fuel type 0.784
Health treatment
Food insecurity
Business discontinuity
Power cost
Rotation sum of squared loadings
% of variance 19.189
Cumulative % 19.189
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attributed to a female-headed sector (89%). Women tend
to have higher social skills than men, as they can connect
easily to their buyers (Cortes et al. 2018). As such, social
skills become an essential livelihood asset in business
continuity, particularly for women.
Sensitivity
Three components accounting for 54% of the total
variability were extracted for sensitivity – namely,
livelihood utilities, physical well-being, and business
risk management (Table 2). Water supply and fuel
type loaded on the first component, which was then
labeled as "livelihood utilities," since they pertain to
resources that facilitate livelihood strategies. The other
two variables (health and food insecurity) loaded on
the second component, which was labeled as "physical
well-being." These variables are essential to maintaining
the physical condition of the owner. The remaining
variables (business discontinuity due to illness and
power cost) are loaded on the third component, referred
to as "business risk management," since illnesses and
power costs cause business inefficiency. The data shows
that informal businesses with high sensitivity tend to
have low access to livelihood utilities, i.e. water and
fuel, as well as fewer options for coping with business
risks, such as sudden illness in the family or loss of
power supply.
The index scores approaching the value of 1.0 is
interpreted as contributing to higher levels of sensitivity.
In Table 2, business discontinuity due to illness offers
the highest source of sensitivity level. Illness, like other
business risks, occurs unexpectedly and leads to economic
and social crises contributing to livelihood vulnerability
(Kabir et al. 2000). Informal food businesses are usually
family or one-person operations of enterprises. They do
not have a formal organizational structure where two or
more people share tasks. Instead, the entire operation
Physical Business risk Index score
management
–0.404
0.526
0.715 0.494
0.667 0.443
0.843 0.666
0.640 0.468
18.378 16.407
37.567 53.974
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is single-handedly managed by the owner, from input
sourcing to selling. Thus, when they get sick, the whole
operation is adversely affected. This is worse if the
household expenditure is heavily dependent on the food
business.
An immediate loss of income may result from changes
in the consumption pattern for both the household and
the business. The capital intended to start the day-to-day
operation is then compromised for medical treatment.
Food consumption may be reduced since the allocation
will be spread out to the days when the business stopped
its operation due to illness. Hence, absenteeism due to
sickness would mean a huge loss for their businesses. This
livelihood risk affects the livelihood outcomes because
this significantly influences livelihood strategies (Su et
al. 2019). Thus, it is a crucial factor in shaping the system
that will support street vendors.
Energy is considered one of the essential livelihood
resources since it is used for cooking, heating, cooling,
lighting, and mechanical power. Consequently, poor
people consume less energy due to the cost. If energy is
used to sustain health (e.g. cooling devices during warmer
days) and improve efficiency in a business operation (e.g.
mechanical drying for dried fish), then less consumption
would increase susceptibility to illness and unproductive
enterprise. Aside from the cost, power consumption
may be attributed to weather variability, household
composition, supply availability, and even gender may
shape people's energy use and consumption (Bayudan-
Dacuycuy 2017).
The variable contributing to a high level of sensitivity is
not the owners' health condition per se but their inability
to continue their businesses when sick, as they cannot
delegate tasks as most of them solely operate their
businesses. Unlike in other formal and growth-oriented
businesses where they have the means to manage the
operation even if the owner gets sick, the street vendors
are left with no choice but to stop selling.
Table 3. Rotated component matrix for exposure.
Variables Physical damages
Productive asset losses 0.826
Household asset losses 0.773
Income losses
Raw materials unavailability
House materials quality
Rotation of sum of squared loadings
% of variance 30.177
Cumulative % 30.177
Hidalgo et al.: Street Vendors’ Livelihood Vulnerability
to Typhoons in Naga City, Philippines
Exposure
For exposure, the PCA generated three components
accounting for 75% of the variance. These components
were labeled as physical damages, business losses, and
shelter type.
The variables that cluster under physical damages were
the loss of productive assets and loss of household assets.
The variables loaded under business losses are the loss of
income and raw materials unavailability. Only one variable
was loaded under shelter type, which is the quality of the
building material. Physical damages had the strongest
influence, explaining 30.18% of the total variance, whereas
business losses had the lowest influence at 21.48%.
The most recent typhoon that hit the Bicol Region at the
time of the survey was Typhoon Nina in 2016. It adversely
affected the 86,000 hectares of agricultural land, causing
PHP 5 billion (approximately USD 89 million) worth of
crop losses (Escandor 2017). In Naga City, half of the
respondents reported that most of their household assets
were damaged or lost during the typhoon. The average
replacement cost for household assets was estimated at
PHP 8,470 per household (approximately USD 151 as
of August 2022). Only 5% of the respondents reported
damages to productive assets, such as makeshift stalls
or cooking equipment. The average replacement cost for
productive assets was placed at PHP 2,613 (approximately
USD 47). Unavailability of raw materials and quality of
house materials obtained the highest index scores, which
means that they significantly indicate exposure.
Business losses were measured by the value of missed
income and the delay of raw materials brought by the
typhoon. The informal nature of the businesses does not
allow the set-up of a solid edifice or even a permanent
space to sell their goods. This increases exposure and,
consequently, vulnerability – particularly to typhoons.
Crop losses due to Typhoon Nina caused the supply of
agricultural products in the region – such as vegetables,
coconuts, and fish products – to drop sharply over an
Business losses Shelter type Index score
0.567
0.495
0.842 0.564
0.690 0.725
0.963 0.902
23.731 21.484
53.908 75.392
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extended period, resulting in a loss in income opportunities
for business owners who depend on these products for
daily sales. For example, a few respondents had to wait
for a year for the supply of coconuts to return to normal
as coconut trees take 6–12 months to recover. On average,
it took 22 days for the supply of agricultural products
to return to normal, adversely affecting daily sales.
Moreover, 85% of the respondents could not operate
for some time after Typhoon Nina. Fruit and vegetable
vendors were most affected, as they had to stop selling
for a month to as long as one year. Only 15% said that
they were able to continue selling despite the typhoon
damages because it did not seriously affect their sources
of supply. On average, the loss in income opportunities
brought about by the lack of raw materials and temporary
business closure was estimated at PHP 800 daily.
Poor shelter contributes to increased exposure (0.963), and
many respondents do not have durable house materials that
can withstand intense storms. Despite the high net returns,
the sector has been unable to invest in suitable housing, with
most of them (55%) living in houses made of light materials
like nipa and plywood; only 9% had houses made of concrete.
Table 4 shows that majority of the variables have positive
index scores. This suggests that these variables are directly
contributing to the vulnerability of the informal food sector.
On the other hand, the variables on ease in obtaining
livelihood assistance, dependency ratio, ease in getting credit,
and water supply show negative scores, which suggests that
these variables are negatively associated with vulnerability.
The mean indices of the variables were computed to obtain
the index of each component. These were then multiplied
by the ratio of the explained variance of the component
as weight in order to get the overall index score for
adaptive capacity, sensitivity, and exposure. Among the
four components under adaptive capacity, financial capital
(0.53) demonstrated the highest source of vulnerability.
This component was associated with savings insufficiency
and credit disposition. The sector's level of adaptive
capacity can be gleaned from the business networks
component – which is composed of the number of
suppliers, livelihood assistance difficulty, social networks,
and sales patronage. The sensitivity of street food vendors
to typhoons was moderate. Three components were used
to measure its index: livelihood utilities, physical well-
being, and business risk management. Among these,
business risk management had the highest index of 0.56,
which was based on the discontinuance of business due
to illness and power cost. The level of exposure had the
highest index among the three elements of vulnerability.
It is measured by physical damages, business losses, and
shelter type – of which business losses (0.644) and shelter
type (0.902) posted the highest index score.
Among the three elements of vulnerability, exposure
has the highest index (0.672), whereas adaptive capacity
obtained the lowest score (0.430). This means that the
street food businesses possessed a high adaptive capacity,
but exposure to a typhoon was high. Concurrently, the
extent of sensitivity was at a moderate level.

Table 4. Results of livelihood vulnerability index score.

Factors/ components/ variables Index scores Vulnerability level
Adaptive capacity 0.43 Moderate
Business networks 0.341 Low
Number of suppliers 0.475 Moderate
Livelihood assistance difficulty –0.298 Low
Social networks 0.398 Low
Sales patronage 0.194 Very low
Business experience 0.426 Moderate
Gender 0.566 Moderate
Commodity diversification 0.357 Low
Age in business 0.355 Low
Human capital 0.453 Moderate
Dependency ratio –0.457 Moderate
Skills diversification 0.45 Moderate
Financial capital 0.53 Moderate
Savings insufficiency 0.572 Moderate
Credit disposition –0.488 Moderate

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Vol. 151 No. 6A, December 2022 to Typhoons in Naga City, Philippines

Table 4 Cont.

Sensitivity 0.497 Moderate

Livelihood utilities 0.465 Moderate
Water supply –0.404 Moderate
Fuel type 0.526 Moderate
Physical well-being 0.468 Moderate
Health treatment 0.494 Moderate
Food insecurity 0.443 Moderate
Business risk management 0.567 Moderate
Business discontinuity due to illness 0.666 High
Power cost 0.468 Moderate
Exposure 0.672 High
Physical damages 0.531 Moderate
Loss on productive assets 0.567 Moderate
Loss on household assets 0.495 Moderate
Business losses 0.644 High
Loss on income (opportunity) 0.564 Moderate
Unavailability of raw materials 0.725 High
Shelter type 0.902 Very high
Quality of house materials 0.902 Very high

The resulting LVI score was 0.051, which indicates that the
informal food sector – in general – had a moderate level of
livelihood vulnerability to typhoons. This suggests that even
if the level of exposure is high, the adaptation outcomes
played a vital role in reducing the sector's vulnerability.
Overall, 10 components consisting of 22 variables were
used to measure the livelihood vulnerability of the
informal food sector in Naga City. The results suggest
that the sources of vulnerability of the informal food
sector were its sensitivity (business risk management)
and exposure (business losses and shelter type). Their
adaptive capacity, on the other hand, explains why they
have remained in business for over a decade despite the
infrastructural and climatic challenges. Business networks
had the lowest index score among the components, which
implies that developing social ties through direct, daily
interactions with their business stakeholders is important.
The results also show that informal food owners were
likely to be less vulnerable if not for the high exposure
of their businesses and homes during typhoons. However,
such exposure appeared to lead them to develop better
adaptive capacity. High exposure was attributed to
their economic status – wherein savings insufficiency,
business discontinuity due to illness, unavailability of
raw materials, and quality of housing – which may be
attributed to the poor financial and physical conditions
in which street vendors operate.
The informal food sector's coping mechanisms were more
passive strategies, whereby they just let the storms pass.
Some perceived it as an opportunity when people would
prefer to buy from the informal sector during and after the
storm. A handful of vendors would also prepare stocks to
take advantage of the situation. Despite the agricultural
damage and electricity disruption that occurred for a
month, the majority were able to restore their businesses
in three days or less.
While street vendors operate informally, they contribute
to addressing economic issues, such as unemployment
and food security. The informal sector has become
such a necessity for survival that the city government
has difficulty controlling its proliferation, which is one
reason for the sector and the city to engage in formal
arrangements to nurture livelihood growth. Regardless
of their status, street vendors are still entrepreneurs that
require a supportive entrepreneurial ecosystem. Moreover,
having survived for so long, street vendors are showing
a myriad of opportunities that the city government may
have overlooked. This, therefore, suggests developing a
non-exploitative institutional design with the government
– including the private sector, where resources can be
accessed by the informal business sector to sustain their
livelihoods which eventually can serve as a conduit toward
a formal business.

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Vol. 151 No. 6A, December 2022
CONCLUSION
This study assessed the drivers of livelihood vulnerability
to the street food sector in the business context. The
LVI generated by this study can be used to measure the
vulnerability of this informal food sector. The study
revealed 10 components that may be used to quantify the
overall livelihood vulnerability of street food businesses.
These components include business networks, business
experience, human capital, financial capital, livelihood
utilities, physical well-being, business risk management,
physical damages, business losses, and shelter type, which
distinctly integrates an entrepreneurial context indicative
of business continuity – a livelihood strategy that would
reduce vulnerability.
The study also revealed some strengths in the informal
food sector’s adaptive capacity, which does not translate
to sustainable livelihoods in general. Livelihood
sustainability was hampered by high sensitivity and
exposure to climate hazards, which would explain why
most street vendors have not graduated from being a
survivalist enterprise to a growth-oriented one. While the
study was specific to the informal food sector in Naga
City, the framework may be used to explore the LVIs
of the street food sector in other areas. Comparing the
LVIs among heterogeneous areas could reveal factors
contributing to their livelihood vulnerability. It may
also be interesting to know if the formal food business
sector has the same level of livelihood vulnerability as
the informal food business sector. Future studies on the
informal business sector may, likewise, pursue livelihood
vulnerability to other forms of shocks and stresses, such
as man-made hazards and economic crises.
ACKNOWLEDGMENTS
The authors would like to thank the Central Bicol State
University of Agriculture and Ateneo de Naga University
for their assistance in the conduct of the survey.
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