MARAWI: Philippine President Rodrigo Duterte said Thursday that a Malaysian militant tipped to become the new leader of the Islamic State in South-East Asia had been killed.

Dr Mahmud Ahmad (pic) was described by the Philippine military as a "high value target" who had funded an attack by pro-IS militants on the southern city of Marawi in May and connected local insurgents with extremists in the Middle East.

Duterte said Dr Mahmud was the latest militant leader to have been killed in the nearly five-month battle in Marawi following the death of Isnilon Hapilon, the head of IS in South-East Asia, and his ally Omarkhayam Maute on Monday.

"Now the other (one), the one they called 'Doc' -- there are three: Hapilon, Omar and the Doc -- he was taken this afternoon, and that completes the story," Duterte said at a business conference in Manila, drawing applause from the crowd.

Hours before Duterte spoke, military chief of staff General Eduardo Ano said the armed forces were "increasingly becoming confident" that Dr Mahmud was among 13 militants killed in fighting on Wednesday night, citing accounts of freed hostages.

A DNA test would later be conducted on the body, military spokesman Major-General Restituto Padilla told AFP.

Pro-IS gunmen occupied parts of Marawi -- the main Islamic city in the predominantly Catholic Philippines -- on May 23, triggering intense fighting that has killed more than 1,000 people and reduced the city centre to rubble.

On Tuesday, Duterte declared Marawi "liberated from terrorists' influence" but the military said fighting was continuing against at least 20 remaining militants.

Following Hapilon's death, terrorism expert Ahmad Kumar Ramakrishna from Singapore's S. Rajaratnam School of International Studies said if Dr Mahmud survived he would likely take over the leadership of IS-linked fighters in the southern Philippines.

"He was the one responsible for the direct linkage of Hapilon to the larger group of the Daesh. It was he who provided the funding necessary to bankroll the siege of Marawi," Padilla said on Tuesday, using another term for IS.

The Jakarta-based Institute for Policy Analysis of Conflict described Dr Mahmud as a former university lecturer who sat on the "inner circle of the Marawi command structure".

"Dr Mahmud controlled recruitment as well as financing and has been the contact person for any foreigner wanting to join the pro-ISIS coalition in the Philippines", stated the July report. - AFP