{
  "title": "Unpacking Macroeconomic Impacts of Climate Events and Policy Implications in the Philippines",
  "publication": "Selected Issues Papers, January 30, 2026",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2026/01/30/unpacking-macroeconomic-impacts-of-climate-events-and-policy-implications-in-the-573629",
  "canonical": "https://www.imf.org/en/publications/selected-issues-papers/issues/2026/01/30/unpacking-macroeconomic-impacts-of-climate-events-and-policy-implications-in-the-573629",
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  "summary": "The Philippines is highly exposed to natural hazards, which are increasingly intensified by climate change, yet quantitative studies on the macroeconomic effects of climate shocks in the country remains limited.",
  "sections": [
    {
      "heading": "Key empirical findings",
      "content": "- Category-5 typhoons raise regional headline CPI by around 0.4 percent.\n- Category-5 typhoons raise regional food CPI by around 0.7 percent.\n- The peak inflationary impact occurs approximately one quarter after the typhoon hits.\n- Category-5 typhoons lower regional GDP by approximately 0.4 percent on impact.\n- The regional GDP decline translates to approximately 0.2-0.3 percent of aggregate GDP.\n- Agricultural labor productivity declines by 2.5 percent following category-5 typhoons.\n- Interpretation: typhoons act as adverse supply shocks, particularly in agriculture, likely raising inflation while dampening economic activity and creating a dilemma for monetary policy."
    },
    {
      "heading": "Model-based scenarios and analytical approach",
      "content": "- Utilized the IMF’s Global Dynamic Network (GDN) model to construct counterfactual scenarios that:\n  - Assess the importance of sectoral heterogeneity in shaping output and inflation outcomes.\n  - Examine alternative monetary policy response functions to inform central bank tradeoffs between supporting output and containing inflationary pressures.\n- Used the DIGNAD model to simulate:\n  - The impacts of natural disasters on the economy.\n  - Policy trade-offs involved in enhancing resilience to natural disasters.\n  - Macro-fiscal implications of various policy options for the Philippines."
    },
    {
      "heading": "Policy implications and trade-offs",
      "content": "- Monetary policy faces a dilemma when typhoons act as adverse supply shocks: tradeoffs exist between supporting output and containing inflationary pressures.\n- Sector-specific effects (notably in agriculture) are central to inflation and output dynamics after severe typhoons; policy responses should account for sectoral heterogeneity.\n- Enhancing resilience to natural disasters involves macro-fiscal trade-offs that require analysis of costs and benefits using models like DIGNAD."
    },
    {
      "heading": "Key publication facts",
      "content": "- Authors: Jean Christine Armas, Yinqiu Lu, Margaux MacDonald, Nick Sander, Jeongwon Son, Azar Sultanov, Sihwan Yang\n- Date: January 30, 2026\n- Series: Selected Issues Paper No. 2026/004\n- Pages: 40\n\nSource: Unpacking Macroeconomic Impacts of Climate Events and Policy Implications in the Philippines (Selected Issues Papers 2026/004).\n\n---\n\n Content in this bundle\n\n- Sipea2026004\n  - Sipea2026004 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2026004 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/01/30/unpacking-macroeconomic-impacts-of-climate-events-and-policy-implications-in-the-573629"
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    "Authors: Jean Christine Armas, Miss Yinqiu Lu, Margaux MacDonald, Nick Sander, Jeongwon Son, Azar Sultanov, Sihwan Yang",
    "Published: January 30, 2026",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229037464.018",
    "Category-5 typhoons raise regional headline CPI by around 0.4 percent.",
    "Category-5 typhoons raise regional food CPI by around 0.7 percent.",
    "The peak inflationary impact occurs approximately one quarter after the typhoon hits.",
    "Category-5 typhoons lower regional GDP by approximately 0.4 percent on impact.",
    "The regional GDP decline translates to approximately 0.2-0.3 percent of aggregate GDP.",
    "Agricultural labor productivity declines by 2.5 percent following category-5 typhoons.",
    "Interpretation: typhoons act as adverse supply shocks, particularly in agriculture, likely raising inflation while dampening economic activity and creating a dilemma for monetary policy.",
    "Utilized the IMF’s Global Dynamic Network (GDN) model to construct counterfactual scenarios that:",
    "Used the DIGNAD model to simulate:",
    "Monetary policy faces a dilemma when typhoons act as adverse supply shocks: tradeoffs exist between supporting output and containing inflationary pressures.",
    "Sector-specific effects (notably in agriculture) are central to inflation and output dynamics after severe typhoons; policy responses should account for sectoral heterogeneity.",
    "Enhancing resilience to natural disasters involves macro-fiscal trade-offs that require analysis of costs and benefits using models like DIGNAD.",
    "Authors: Jean Christine Armas, Yinqiu Lu, Margaux MacDonald, Nick Sander, Jeongwon Son, Azar Sultanov, Sihwan Yang",
    "Date: January 30, 2026",
    "Series: Selected Issues Paper No. 2026/004",
    "Pages: 40",
    "**Sipea2026004**"
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