MANILA: One person was killed and at least six were injured on Monday as heavily-armed riot police clashed with hundreds of squatters in a suburb of the Philippine capital Manila, police said.

The fatality occurred as squatters blocked a road in the residential suburb of Paranaque, hurling large stones at police, armed with shields and truncheons, who were trying to disperse them.

Local precinct commander Senior Inspector Ani Endraca said one person was killed and another was in a critical condition after they were shot in the confusion.

"If you saw the situation here, you would think you were in Iraq," he said, adding that five police and government personnel were hit by flying rocks.

He said it was only after the rioters were dispersed that police found a dead man on the road they appeared to have been shot in the head.

A village watchman was also shot and subsequently rushed to hospital, Endraca said, adding that it was not known who had shot the two men.

Local broadcaster GMA showed footage of a policeman firing an assault rifle towards the rioters as the police were showered with rocks.

"We will have to check on that," said Endraca when told of the incident.

Paranaque Mayor Florencio Bernabe said authorities only wanted to remove a makeshift marketplace to make way for low-cost housing but the squatters were told they would be driven out of their homes as well.

"They are easy to fool. They are very vulnerable. I understand their fears," he said in an interview with GMA.

Such violent clashes between riot police and squatters are a frequent event in the highly-congested Philippine capital where rural migrants have crowded into slums, worsening urban blight.

More than two million people in Metro Manila or roughly one fifth of the sprawling city's population live in shanty towns as so-called informal settlers or squatters.