The financial health of major corporations is essential for local and national economic stability. This study investigates financial distress among selected large corporations in Cebu City, Philippines, from both microeconomic and macroeconomic perspectives. It examines internal issues like operational inefficiencies and governance problems, alongside external economic influences, to identify key drivers of financial instability.

Using financial metrics from the Philippine Stock Exchange (2022), Altman Z-scores were calculated to assess financial health, categorizing firms into "distress" and "grey" zones. Expert interviews helped establish causal relationships between economic factors and financial distress, analyzed using Fuzzy Cognitive Mapping (FCM) to quantify each factor’s impact.

The findings reveal that companies with poor operational efficiency are at significant risk. Improving Operational Efficiency and Cost Structure had the highest potential to reduce distress, with a change level of 0.25. Industry-Specific and Global Economic Factors were also crucial, affecting distress reduction by 0.19. The study recommends enhancing operational processes, adopting lean practices, and strengthening governance to build financial resilience. These strategies are vital for the long-term stability of Cebu City’s economic ecosystem.