Senior Superintendent Moises "Kamagong" Guevarra, Malabon City police chief, identified the victim as Pablito Dionisio, 54, a resident of Barangay Navotas West in Navotas.
One of the two gunmen, identified as Ronnie Sueno, 30, was later killed in a brief firefight with SPO4 Leopoldo Reyes.
The officer was wounded in the left arm and left foot. He is now confined at the Chinese General Hospital.
Inspector Carlos Dilag, Malabon police staff duty officer, said Dionisio, owner of Toreng I Consignacion on Estrella street in Barangay Tañong, Malabon, was attending to his customers when approached by two men at around 3:45 a.m.
One of them pulled out a handgun and shot Dionisio in the chest, killing the trader on the spot.
Reyes, an intelligence agent of the Malabon City police station on a surveillance assignment in the area, witnessed the incident and confronted the gunmen.
The suspects, instead of giving up, fired at Reyes.
In the ensuing shootout, the policeman hit Sueno three times in different parts of the body. The other suspect fled.
Recovered from Sueno was a caliber .38 revolver.
Northern Police District director Chief Superintendent Leopoldo Bataoil visited Reyes yesterday at the Chinese General Hospital and commended him for "a job well-done."
"I will recommend him for awarding of the Medalya ng Sugatang Magiting and the Medalya ng Kagalingan," Batoil said.
He said that the Philippine National Police (PNP), in cooperation with the Chinese General Hospital, would shoulder the hospital expenses of the wounded officer.