# **Introduction**

While there is a great deal of uncertainty over the exact magnitudes of the global changes in temperature and precipitation, it is widely accepted that significant deviations of the variability of climate from its historical patterns are likely to occur (IPCC, 2007).<sup>1</sup> Considering that millions of poor households in rural areas all over the world are dependent on agriculture, there are increasing concerns that the change in the patterns of climatic variability is likely to add to the already high vulnerability of households in rural areas of developing countries, thus posing a serious challenge to development efforts all over the world. In view of this impending threat of climate change upon the poor, it is critical to have a deeper understanding of the household adaptation strategies and targeted measures that could mitigate the poverty impacts of erratic weather.

With 60% of its population living in coastal areas, sensitivity to the El Niño phenomenon and a location which makes it prone to typhoons, the Philippines is one of the countries with the highest exposure to climate change risks. It is among the top 10 countries worldwide at risk for both climate change and disasters.<sup>2</sup> Forecasts on climate change predict an increase in average annual precipitation for the Philippines, coupled with an increase in variability within the year, with wetter wet seasons and dryer dry seasons.

Understandably, given their disruptive and destructive power, typhoons attract a lot of attention in the Philippines. It is estimated that 0.5% of GDP is lost to natural disasters each year. This figure is expected to increase to 1 or 2% due to climate change. In the recent past, a typhoon hit the Philippines in the first week of September 2006, in the last week of November 2006, and in the third week of June 2008. In September and October 2009, two typhoons, Ondoy and Pepeng, are estimated to have cost the Philippines economy 2.7% of GDP (Philippines PDNA, 2009).

The welfare impacts of extreme weather events and natural disasters, though rather infrequent, can be easily appreciated since they are very visible. From a policy perspective, if a typhoon destroys homes and displaces populations, the action required is to rebuild the houses and the basic infrastructure that was destroyed. On the contrary, it is way more difficult to assess the welfare impacts of deviations in rainfall from normal patterns that are typically more frequent and of smaller magnitude. What evidence is there on the extent to which smaller and more frequent weather shocks impact on household living standards in the Philippines and what is the scope for public intervention?

> 1 According to the Intergovernmental Panel on Climate Change (IPCC) a narrow definition of climate refers to the statistical description in terms of the mean and variability of quantities such as temperature, precipitation and wind over a period of time ranging from months to thousands of years.  The norm is 30 years as defined by the World Meteorological Organization (WMO).  Climate is different from weather which refers to atmospheric conditions in a given place at a specific time.  The term “climate change” is used to indicate a significant variation (in a statistical sense) in either the mean state of the climate or in its variability for an extended period of time, usually decades or longer (Wilkinson 2006).

> 2  The impacts of climate change on Philippines are summarized in the recent document “A Strategic Approach to Climate Change in the Philippines” by the Sustainable Department of the EAP region.

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