The RAAF will start flying its advanced intelligence-gathering planes over the southern Philippines to help the country's military beat back an onslaught by Islamic State-affiliated insurgents.

Defence Minister Marise Payne has confirmed to Fairfax Media that Australia will operate two of its P-3 Orion aircraft over the southern region of Mindanao, where the Philippines military is locked in a furious battle with insurgents that has already claimed hundreds of lives and displaced thousands more people.

The decision by the Turnbull government underscores the seriousness with which it views the growing links between Islamists in the Philippines and the so-called Islamic State.

With the Islamic State losing territory in Iraq and Syria, there are concerns that it may disperse and set up in places such as the Philippines, from which it could threaten the rest of the region.