MANILA (Bloomberg) - Philippine forces said they're in control of most of Marawi, the southern city where almost 100 people were killed and 60,000 displaced following clashes in the past week between the military and Muslim extremists linked to Islamic State in Iraq and Syria (ISIS).

"Our ground commanders have assured that the end is almost there," Brigadier General Restituto Padilla said in a televised briefing in Manila on Monday (May 29). Government troops are in control of Marawi "except in certain areas" that militants hold, making "surgical air strikes" necessary, he said.

The crisis has claimed the lives of 19 civilians, 18 government troops and 61 extremists, according to presidential spokesman Ernesto Abella, making it the worst in the Mindanao region in almost four years.

Almost 400 residents were rescued from Marawi, the most crowded city in the autonomous Muslim area with a population of 200,000.

President Rodrigo Duterte placed Mindanao under martial law on May 23 as insurgents in Marawi with ISIS flags burned buildings, occupied offices and freed more than 100 inmates from jail.

Duterte said on Saturday (May 27) that military rule, limited by the Constitution to 60 days, will remain for as long as necessary, and the Supreme Court and Congress must not intervene.

The US embassy received information that the Philippines placed the police on full alert throughout metropolitan Manila, with checkpoints and security patrols planned in the capital, according to a May 28 statement.

Fighting in Marawi started in the afternoon of May 23 as state enforcers tried to capture Isnilon Hapilon, a commander of the Abu Sayyaf militant group who had pledged allegiance to ISIS.

Duterte said Marawi is home to the Maute group, which is led by brothers who were former Manila cops and later became drug traffickers to fund their terrorism.

The crisis is turning out to be the worst for Mindanao since the 2013 siege in Zamboanga City by Muslim rebels loyal to Nur Misuari, a conflict that led to the deaths of at least 203 people and burning of 10,000 homes.

Duterte said on May 27 that he is open to Misuari's offer to augment government troops with his own fighters.

Financial markets have withstood the latest incident.

The Philippine Stock Exchange Index has risen about 1 per cent since the May 23 clashes and subsequent martial law declaration.

The peso touched 50 per dollar on May 24 for the first time in two weeks but has since recovered to 49.838 on Monday afternoon.