FISHERMEN and rescue workers have hauled dozens of people out of the sea after a ferry sank in the central Philippines, but at least two passengers drowned, authorities say.

In the latest disaster to hit the nation's notoriously dangerous sea transport industry, the ferry mysteriously sank in calm weather before dawn on Friday about two kilometres from Burias island.

Fishermen on small outrigger motorboats were among the first to arrive on the scene and saved many lives, said local coastguard deputy chief Bayani Belisario.

"They (the passengers) were floating in their life jackets and the rescuers picked them out of the water," Belisario told AFP.

He said several people from the sunken ship were also able to make the long swim to the shores of Burias on their own.

A navy plane and a coastguard ship, diverted from taking part in maritime exercises in Indonesia, joined the search and 55 people were rescued throughout the morning, according to the authorities.

But Belisario said the bodies of two women were recovered from the water.

Coastguard volunteer Amadeo Tan told ABS-CBN television that his wife, who was on the ship, called him by her mobile phone to say the boat had sank.

"She was already floating in the water. I did not think twice and we rushed to the site," said Tan, a resident of Masbate island, the ferry's destination.

Tan said his group rescued dozens including his wife, who was unhurt but left traumatised by the incident.

The ferry's manifest listed 35 passengers and 22 crew aboard but local civil defence chief Raffy Alejandro said there could be as many as seven people still missing.

Seven drivers and assistants who brought two buses and a truck aboard the roll-on, roll-off ferry may not have been listed because they travelled for free, Alejandro told AFP.

He said the cause of the sinking was not yet known but the ship's captain, who was among those rescued, reported the vessel may have been unbalanced by the buses and large truck.

Sea accidents are common in the Philippines due to poor safety standards and overloading.

The world's deadliest peacetime maritime disaster occurred near Manila in 1987 when a ferry laden with Christmas holidaymakers collided with a small oil tanker, killing more than 4300 people.

Originally published as Two dead after Philippines ferry sinks