The Philippines Thursday dismissed as "propaganda" a claim by the Islamic State group that its fighters had slaughtered nearly 100 soldiers and established a base in the mainly Muslim south where local militants are battling government forces.

The US-based SITE Intelligence Group reported Wednesday IS said its "mujahideen blew up seven troop transports and killed nearly 100 enemy forces".

Earlier this week the Philippine military said it had killed 25 Islamist Abu Sayyaf guerrillas as it presses an offensive on the southern island of Basilan despite the loss of 18 soldiers.

But Philippine defence secretary Voltaire Gazmin denied Thursday IS had joined forces with Abu Sayyaf.

"Our information is that there is no formal ISIS organisation here in the Philippines," he said, using an alternative acronym for the group.

Military spokesman Brigadier General Restituto Padilla rejected the IS claim it had killed scores of soldiers.

"This is nothing but propaganda which we would encourage everyone not to pay attention to," he told AFP, and downplayed public pledges of allegiance to IS by Abu Sayyaf and other Muslim rebel groups in the south.

Padilla said clashes with Abu Sayyaf, a homegrown extremist group known for kidnappings and bombings, were on-going in Basilan.

The death toll of soldiers remained at 18 but the number of Abu Sayyaf killed had risen to 31, Padilla said, adding that no military trucks had been destroyed.

Among those killed were a Moroccan bomb expert called Mohammad Khattab, who the military said had been sent to build ties between local Muslim rebel groups and an international jihadist network.

Marc Singer, director of risk consultancy group Pacific Strategies and Assessments, said he was sceptical that IS had a foothold in the Philippines but warned that many Filipino groups wanted to emulate them.

"There is a genuine fascination among poor Filipinos in the Muslim south who lack education... their sole understanding of Islam today is from the Internet and what they hear (on the news) and this may drive them to more nefarious acts," he told AFP.

Based in the southern islands of Basilan and Jolo, Abu Sayyaf has been blamed for the country's worst terror attacks, including a 2004 Manila Bay ferry bombing that claimed 116 lives.