President Gloria Arroyo has lifted the "state of calamity" imposed due to the menace of two destructive storms over the central and southern Philippines a week ago, her spokesman said Saturday.

But Arroyo is maintaining the state of calamity over the main Philippine island of Luzon which bore the brunt of Tropical Storm Ketsana and Typhoon Parma over the past two weeks, said spokesman Cerge Remonde.

The order effectively lifts price controls over the central islands of the Visayas and the southern island of Mindanao and their surroundings which were untouched by the storms, he said.

Arroyo had earlier placed the capital and its surroundings under a state of calamity on September 27 after Ketsana struck, bringing the worst flooding to the areas in four decades.

She expanded this to the entire country on October 2 as Typhoon Parma approached the north.

"This decision is based on the obvious absence of bad weather in (central and southern) regions as well as the president?s determination that it is no longer necessary to maintain price ceilings nationwide," Remonde said.

Under a state of calamity, government agencies are allowed to tap special funds and price controls can be imposed on essential items like food and medicine.

Manila had justified the declaration of a nationwide state of calamity as a way to ensure traders would not take their goods from areas covered by price controls to sell them elsewhere.

Remonde said that the state of calamity, including the price controls, would remain in place in Luzon at least until December.

Over 600 people were killed by the two storms that have devastated farmland, homes and factories in Manila and the northern regions.