The Philippine Defence Minister, Gilberto Teodoro, told the BBC that the rescue operation had been helped by good weather and the presence of other vessels close to the site.
The SuperFerry 9 was said to be carrying 847 passengers and 117 crew plus four sea marshals on its journey from General Santos to Iloilo.
A statement issued on the SuperFerry website said that the ship began listing to the right at 0230 on Sunday (1830 GMT Saturday).
Passengers were told to don life jackets while the captain tried to correct the list, the statement said.
When the captain determined that the list was irreversible, he gave the order to abandon ship, and life rafts were launched.
Shocked passengers were brought ashore by other vessels
The statement said that the crew were the last to leave the ship at 0842 local time, when the ferry tilted and sank.
Officials said that those rescued were transferred to navy ships, two nearby civilian vessels and other smaller boats which had responded to the Mayday call.
The coastguard in Manila said nine bodies had been brought in so far by rescue boats and fishing vessels. However the death toll could rise if reports of more fishing boats bringing in dead bodies proved accurate.
The Philippine air force and army have sent helicopters to help in the search for those still missing.
The cause of the sinking was unknown, but the weather was reported to be fair at the time of the incident.
PHILIPPINES' WORST FERRY DISASTERS
1987: More than 4,300 people die when the Dona Paz ferry collides with an oil tanker off Mindoro island - the world's worst peacetime shipping disaster
2008: More than 800 people killed when the Princess of the Stars ferry capsizes during a typhoon
1988: Dona Paz's sister ship, Dona Marilyn, sinks off Leyte province, killing 250-300 people
1998: The Princess of the Orient ferry sinks near Batangas province, killing 150-200 people
1994: About 140 people die when a freighter hits the Cebu City ferry in Manila Bay
2004: A fire aboard the Superferry 14 kills 116 people near Manila Bay. Abu Sayyaf claims it planted a bomb on board
The ferry ran into trouble about 530 miles (860km) south of the Philippine capital, Manila.
One passenger said the ship began listing in the middle of the night, but he was assured by the crew that everything was all right.
However, a couple of hours later the situation worsened.
"The ship shifted suddenly and some people just panicked," a man named as Roger Cinciron was quoted as telling a local radio station by phone. He was speaking from one of the life rafts as he waited to be rescued.
The ferry had been due to arrive in Iloilo later on Sunday, AP quoted the ship's owner, Aboitiz Transport System, as saying.
A BBC correspondent says maritime accidents are common in the Philippines because of tropical storms, poor ship maintenance and lax safety enforcement.
Bookmark with:
What are these?