"Experts noted no observable oil spill or environment pollution or fish kills within the vicinity of the shipwreck," Maria Elena Bautista, transportation undersecretary and head of a task force, told a news conference.

"There are no signs of contamination. But, we are not sure how long the packaging of the toxic chemicals and fertilisers would hold. "The fishing ban will be maintained around the 5-km radius of the shipwreck as a continuing precautionary measure."

The vessel was carrying 10 metric tonnes of endosulfan, a highly toxic fertiliser, and about one tonne of pesticides. it also had about 250,000 litres of special fuel oil.

Bautista said salvage operations to recover the deadly cargo would not start until Aug. 4. Sulpicio Lines Inc, the ferry's owner, is due to sign a US$7.5 million deal later on Friday with a private firm to refloat the ship.

Only 56 people are known to have survived the June 21 disaster, while around 200 bodies have been recovered and DNA samples taken to identify them.

The sinking is the country's worst sea accident since the Dona Paz ferry collided with an oil tanker in 1987, killing more than 4,000 people.

Sulpicio Lines also owned the Dona Paz. The company has been involved in two other major shipping accidents. (Reporting by Manny Mogato; editing by Raju Gopalakrishnan)