Manila, Nov 9 (IANS): Climate change is taking a heavy toll on Filipinos' lives, properties and livelihoods, and might hamper the country's ambition of becoming an upper middle-income country by 2040, according to a World Bank report on Wednesday.

The Country Climate and Development Report for Philippines warns that the archipelago country is vulnerable to sea level rise, with nearly half of its 110 million population living in urban areas and coastal areas, Xinhua news agency reported.

Climate shocks, whether in the form of extreme weather events or slow-onset trends, will hamper economic activities, damage infrastructure, and induce deep social disruptions, the report said.

As one of the countries most affected by extreme climate events, the Philippines has experienced highly destructive typhoons almost annually for the past 10 years. Annual typhoon losses have been estimated at 1.2 percent of the country's gross domestic product (GDP), the report noted.

Policy actions and investments, principally to protect valuable infrastructure from typhoons and to make agriculture more resilient through climate-smart measures, could reduce these negative climate impacts by two-thirds, World Bank Vice President for East Asia and Pacific Manuela Ferro said.

"Adaptation to the risks of climate change, including both extreme and slow-onset problems, is thus critical for the Philippines," the report said, warning that "policy inaction would impose substantial economic and human costs, especially for the poor."

Meanwhile, the report warned climate change will affect many people even with vigorous adaptation efforts. Some climate actions may also have adverse effects on particular groups, such as workers displaced by the move away from high-emission activities.

It recommended that the existing social protection system in the Philippines be strengthened and scaled up to support affected sectors and groups.