This paper investigates how rural Filipino households manage income and expenditure shocks through informal networks. Using detailed data on gifts, loans, and asset sales, the study finds that shocks significantly affect gifts and informal loans but have little impact on livestock and grain sales. Risk sharing primarily occurs through networks of friends and relatives, with flexible, zero-interest informal loans playing a key role. Certain shocks are better insured than others, and financial savings are used to deal with risk. The evidence rejects models of risk sharing in rural communities as Arrow-Debreu economies with combined credit and insurance markets but is consistent with models of quasi-credit where enforcement constraints limit gift giving. The paper uses original data from the rural Philippines to examine risk-sharing behavior. Results indicate that informal credit and gifts allow households to share risk within family and friend networks. Risk is shared through flexible, zero-interest informal loans rather than gifts. Households with high levels of outstanding informal debt borrow less. Certain types of risk are better insured than others. The study also finds that financial savings, gifts, and informal loans are the primary mechanisms through which households deal with shocks. Risk sharing is affected by what happens to network members: if they are doing well, respondents find it easy to raise funds informally; if network members are facing serious problems, respondents encounter difficulties raising funds through informal channels. The paper also investigates whether flows of funds between households depend on past use of gifts and loans. Results indicate that outstanding debt reduces net informal borrowing, and past gifts have a negative effect on current borrowing. The study finds that gifts and loans both include an element of future reciprocity, with reciprocity being explicit in loans and implicit in gifts. The evidence suggests that informal networks play a crucial role in risk sharing, with households relying on friends and relatives for support. The study concludes that informal credit and gifts are the primary mechanisms through which households deal with shocks, and that risk sharing is affected by what happens to network members.This paper investigates how rural Filipino households manage income and expenditure shocks through informal networks. Using detailed data on gifts, loans, and asset sales, the study finds that shocks significantly affect gifts and informal loans but have little impact on livestock and grain sales. Risk sharing primarily occurs through networks of friends and relatives, with flexible, zero-interest informal loans playing a key role. Certain shocks are better insured than others, and financial savings are used to deal with risk. The evidence rejects models of risk sharing in rural communities as Arrow-Debreu economies with combined credit and insurance markets but is consistent with models of quasi-credit where enforcement constraints limit gift giving. The paper uses original data from the rural Philippines to examine risk-sharing behavior. Results indicate that informal credit and gifts allow households to share risk within family and friend networks. Risk is shared through flexible, zero-interest informal loans rather than gifts. Households with high levels of outstanding informal debt borrow less. Certain types of risk are better insured than others. The study also finds that financial savings, gifts, and informal loans are the primary mechanisms through which households deal with shocks. Risk sharing is affected by what happens to network members: if they are doing well, respondents find it easy to raise funds informally; if network members are facing serious problems, respondents encounter difficulties raising funds through informal channels. The paper also investigates whether flows of funds between households depend on past use of gifts and loans. Results indicate that outstanding debt reduces net informal borrowing, and past gifts have a negative effect on current borrowing. The study finds that gifts and loans both include an element of future reciprocity, with reciprocity being explicit in loans and implicit in gifts. The evidence suggests that informal networks play a crucial role in risk sharing, with households relying on friends and relatives for support. The study concludes that informal credit and gifts are the primary mechanisms through which households deal with shocks, and that risk sharing is affected by what happens to network members.