The wooden-hulled ferry and the fishing boat were between them carrying at least 73 people when they collided in Manila Bay in the early hours.

Coastguard spokesman Commander Armando Balilo told local media 46 people had been rescued from the waters.

There were no reports of bad weather conditions in the area and the cause of the collision is not yet clear.

It comes as thousands of people in the Philippines travel home for the Christmas period. Both of the vessels have sunk.

Mr Balilo said rescue teams had been dispatched and boats in the area had also been asked to help hunt for survivors.

Maritime accidents are common in the Philippine archipelago because of tropical weather, badly maintained passenger boats and weak enforcement of safety regulations.

In June 2008, hundreds of people were killed when a 23,000-tonne ferry - Princess of the Stars - capsized during a typhoon off the central island of Sibuyan.