An Islamic criminal group has executed the second of three foreigners kidnapped from a resort in the southern Philippines, despite a relentless hunt by the Philippine military.

A spokesman for the Islamic State-linked Abu Sayyaf group told the Philippine Daily Inquirer that Canadian sailor Robert Hall was beheaded on Monday afternoon after the expiry of a deadline to pay a US$13 million ransom for three hostages.

The body would be dumped in a town, he said. Philippine media also quoted multiple sources confirming the killing because ransom demands were not met.

Canadian Prime Minister Justin Trudeau said his government has "compelling reason to believe" that Mr Hall is dead.