A raid on the biggest jail in the Philippines has uncovered drug lords "living like kings" in secret luxury cells with strip bars, sex dolls, a jacuzzi and methamphetamines, the country's justice secretary says.

Police commandos in full battle armour and tracker dogs swooped down on the infamously crowded Bilibid prison complex before dawn to verify reports that drug rings were operated from behind bars.

Justice secretary Leila de Lima expressed shock at the outcome of Monday's raid.

She said aside from the methamphetamines, also known as ice, police found 1.4 million pesos ($31,000) in cash, inflatable sex dolls, a strip bar and a jacuzzi across 20 air-conditioned "villas".

"They are here to serve jail time but instead, they're living like kings," she told reporters after the raid.

Ms de Lima said jail officials who conspired with the inmates would face "outright dismissal".

One "villa" had a fully inflated sex doll sprawled on the bed, while an adjacent room was equipped with an elevated platform, strobe lights and a mirror ball, police said.

Police said the platform was for strippers who were smuggled into the jail compound. A bright blue bra with feathers was hung beside the stage.

Another area had a small concert stage equipped with a flat-screen television, a drum set, guitars and keyboards.

A safe in one of the rooms contained Rolex and Patek Philippe watches, Louis Vuitton wallets and stacks of dollar bills, police said.

Bathroom floors and walls were covered in marble tiles, showers with hot water were encased in glass and a bathtub had a flat-screen television attached to it.

One room was stocked with an expensive whiskey brand.

The luxury villas, for drugs lords, kidnap gang leaders and other powerful inmates, were scattered around the sprawling 500-hectare compound.

Cases of rich inmates bribing prison authorities and building small houses, or simply leaving the jail, have emerged publicly repeatedly over the years.

AFP