Lolibeth Medrano, an official at the environment department, told a forum on environmental issues in the Philippines that air quality in Manila had been improving since 2000, a year after the clean air law was passed.

"About 70 to 80 percent of air pollution in the country is caused by vehicle emissions," Medrano told reporters. "Our air pollution level is decreasing but still above our standards."

The remaining 20 to 30 percent of the smog was caused by factories and construction work, she added.

Manila's current level of "total suspended particles" was 152 micrograms per cubic metre, higher than the standard of 90 but an improvement from a high of 171 last year.

A study by the health department showed poor air quality posed considerable risks to residents of the capital, a sprawling and congested city of 12 million people.

The World Bank, on its Web site, says air pollution causes an estimated $1.5 billion per year in economic losses to the Philippines, with water pollution adding another $1.3 billion.

Bert Suansing, a consultant to the transportation department, said the Philippines had not fully complied with the standards set in the 1999 law, which were based on European benchmarks in the 1980s known as Euro 1.

"We could only meet up to 60 percent of the Euro 1 standard due to inefficiency and corruption," he told Reuters, saying it would take years before the Philippines could adopt the current Euro 4 or the US 1998 standards for clean air.

The Philippines has about 4 million registered motor vehicles, about 60 percent of them running on diesel. There are also about 5 million motorcycles, most with two-stroke engines that emit higher levels of pollutants.

Suansing said an average of 25,000 trucks, cars and jeepneys were stopped every year for roadside checks by the transportation department, with 70 percent failing the emission tests.