MANILA (Reuters) - Philippine President Benigno Aquino denied on Wednesday (March 9) that Islamic State in Iraq and Syria (ISIS)-linked militants are operating in the southern Philippines, describing armed groups in the area as mercenaries who are looking to raise funds from abroad.

A handful of small but violent Islamist militant groups in the south have posted videos in social media pledging alliance to ISIS militants in Iraq and Syria and displaying the trademark black flag.

"It's difficult to call them Islamic State groups," Mr Aquino told reporters at an air base south of Manila, adding the groups were not driven by ideology nor religion. "We believe it is mercenary reasons that are prompting them to do this."

Mr Aquino said local groups have been staging attacks in the south to draw attention to themselves and raise funding from the Middle East, especially from Islamic State.

Last month, the army and air force fought a small Muslim rebel group, which claimed to have links with ISIS militants, in Lanao del Sur province. About 40 rebels and five soldiers died in the nine-day battle.

On Monday, Mr Ebrahim Murad, head of the main Muslim rebel group talking peace with government, warned that ISIS was trying to gain a foothold in the Philippines by taking advantage of the non-passage of a new Muslim autonomy law.

"We are concerned that they can capitalise on this because of the frustration of the people in the area is now very strong," Mr Murad said at a new conference in Kuala Lumpur, where his group held talks with government negotiators.

The government's chief peace adviser, Ms Teresita Deles, shared the Muslim rebel leader's opinion about possible penetration of ISIS militants in the south.

"We agree that the frustrations of the people on the ground can lead to recruitment for radical extremists," she said, adding the government and the Moro Islamic Liberation Front are working together to curb the spread of extremism.

Security forces say there is no evidence to show local rebel groups have links with Middle East-based extremists.

"There is no direct, verifiable and credible presence of any international groups in the country," military spokesman Brigadier-General Restituto Padilla said.