For some reason when I update the app the database is getting deleted.
When wyBuild creates a patch from one version to the latest it compares all the files. For instance, if in your old version in wyBuild you have a files, let's call it "Database", and in the new version this file isn't present then wyBuild will see that change to mean you want to delete the "Database" file.
My guess is that's what you're doing right now.
The way to fix this is to either remove the "Database" file from your old version (so wyBuild won't delete the file) or add the "Database" file to your new version as well (so wyBuild will look at the old and new versions of the file and see if it should be patched). Does that make sense?
When I did the initial install, I made sure the database file was made permanent
I'm not sure what you mean. Where (or how) did you make the database "permanent"?