Four other hostages, including two businessmen from Malaysia and South Korea, held at the same location in the jungle near Indanan town on Jolo island have still not been accounted for, army spokesman Captain Antonio Bulao said.
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The two coast guardsmen took advantage of the confusion during the firefight and escaped.
Soldiers clashed with Abu Sayyaf Muslim extremists on two islands in the southern Philippines, leaving 20 of the rebels dead even as fighting continued to rage, the military said Wednesday.
The military believes that many other terrorists were wounded in the fighting.
Arrojado said that five of the slain ASGs were recovered along with three firearms.
“It was a long fight: one hour and 35 minutes”.
The coast guard personnel had been kidnapped in May in Aliguay Island, Dapitan City – home to two high-end resorts frequented by foreign and domestic tourists – alongside a village chief who was beheaded last week.
Brig Gen Alan Arrojado told AP that Mr Pagaling and the other hostage, Gringo Villaluz, told him the militants “panicked and fled in different directions after seeing that the army had come so close and had begun the assault”.
“The order from headquarters was to rescue all of them”.
Last week, the decapitated body of a village official kidnapped by the Abu Sayyaf was found in Jolo. He said the military would continue efforts to free all the hostages.
Fifteen Abu Sayyaf Group (ASG) bandits were reportedly killed during an encounter with Joint Task Group Sulu units at Sitio Marang, Barangay Buanza, Indanan town, Sulu province Wednesday afternoon.
Abu Sayyaf, a loose band of several hundred armed men, was founded in the 1990s with funding from al-Qaeda.
The group engages in kidnappings to finance operations, often targeting foreigners and sometimes beheading captives if ransom is not paid.
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The group has also been blamed for the worst terror attacks in the country, including the firebombing of a ferry off Manila bay in 2004 that killed over 100 people.
