The militants, numbering around 80 men, fired their guns in the air as they swooped down on the market in Datu Paglas town in Maguindanao province, 960 km south of Manila, dpa news agency quoted Lieutenant Colonel John Paul Baldomar, an army spokesman, as saying.

"They took food and threatened the civilians," Baldovar said.

"They were cornered when our forces were deployed in different areas and occupied (part of the market) because of the presence of our soldiers and policemen."

The militants, who were members of the Bangsamoro Islamic Freedom Fighters (BIFF), fled six hours later when more soldiers arrived, he added.

As they withdrew, the rebels opened fire on a group of commuters along the highway, triggering a firefight with soldiers, Baldovar said.

No civilians or soldiers were reported killed or hurt in the violence, said Major General Juvymax Uy, an army division commander.

The rebels were fleeing military operations in the nearby towns of Shariff Aguak, Datu Saudi Ampatuan and Mamasapano over the past two weeks, he said.

The rebels left home-made bombs at the market, but no property was damaged, Uy said. He also denied social media reports that hostages were taken.

The BIFF is a splinter group of the Moro Islamic Liberation Front, which signed a peace agreement with the government in 2014.

It has allied itself with the Islamic State and has been blamed for bombings, extortion and attacks on government troops in the province of Maguindanao.