In a picture taken on March 2, 2010 a worker holds the body of a submachine gun at the cooperative workshop of the Workers League of Danao (WORLD-MPC) in Danao, Cebu. (AFP)

DANAO CITY, Cebu, May 3, 2010 (AFP) - A casually dressed salesman held court in a cramped central Philippine backyard workshop, his only merchandise a shiny .45-calibre pistol wrapped in oily newsprint.

The weapon, lacking serial numbers, was stencilled with information that it was made in a nonexistent place called "Fort Lauderdale, Florida, Canada." It cost about 75 dollars, half the price of an imported, licensed equivalent.

"One week," the unnamed man signalled with his fingers to an AFP reporter making a furtive visit, indicating the delivery time, before quietly asking how many firearms the potential buyers needed.

In the small, quiet city of Danao, skilled but unlicensed gunsmiths toil away in secret shops hidden among warrens of crowded hovels, pursuing a generations-old tradition that emerged from a culture of political violence.

Danao after World War II was known as the fiefdom of the late Ramon Durano, its long-time mayor and known as a local strongman.

He established the foundries that started the gunsmiths on their way, said his grandson Oscar Rodriguez.

"My grandfather was known as a warlord during those days, when politicians were known for their guns, goons and gold," said Rodriguez, a member of the city council.

Danao has since gained fame, or infamy, as one of the Philippines' centres of gun-making excellence with whole families and villages making thousands of firearms a year.

They contribute to the more than three million guns in circulation across the Philippines, a plethora of firearms that is a key reason behind the nation's many politically related killings.

The underground industry is allowed to continue with little interference from authorities.

Nearly 100 people have been killed in political violence ahead of next week's national elections, according to police statistics.

The suspects include Maoist guerrillas as well as hired guns employed by politicians in some of the most fiercely contested of the 17,000 posts up for grabs.

Jose Thaddeus Roble, the secretary to the Danao mayor, concedes some of the local gunsmiths' output may have gone to criminals, but insists the gunsmiths should not be blamed for the violence.

"It depends on who uses the firearms," Roble said.

He also said authorities were trying to bring the illegal gunsmiths in from the cold to stop their products getting into the hands of criminals or modern-day political warlords.

"Some gunmakers have agreed to join a cooperative, who also include financiers and runners," said Roble, who helped organise the group along with a representative from the national police's firearms and explosives unit.

"Now they have vaults where their output is inventoried by the police. After that the guns can be sold directly to gun stores or to security agencies," he added.

"It is better that the activity gets regulated so the output does not fall into the hands of criminals."

The cooperative, now with 300 members, is housed in a poorly lit, rundown warehouse across the road from a sugar mill, both owned by the Durano family.

At least a dozen men, some stripped to their waists work the hand-operated milling and lathe machines, grinders and portable drills. They make about 30 pieces a month, said Dax Banzon, treasurer of the cooperative.

"They can copy any gun," he told AFP. However, they make mostly 9-millimetre and .38-calibre pistols.

The legal Danao gunsmiths hope to convince the government that the products are good enough to be used by the nation's military and police.

However, Roble says they are unlikely to succeed because of a strong lobby from firearms importers, including those who have a lock on supply contracts with the military and police.

Meanwhile, many other Danao gunsmiths have refused to join the cooperative, called World Workers' League of Danao, meaning an underground market continues to thrive.

"They are reluctant to sign up because they would be identified as gunmakers," said Roble.