The Philippine military said Islamist militants who had holed up in a primary school in the south early on Wednesday had retreated after a gunbattle with troops but were holding some civilians hostage. "The school area is again safe", said Brigadier General Restituto Padilla as reported by Reuters.
The town of Pigcawayan lies 160km south of Marawi City, which has been taken over by pro-Islamic State forces and civilians have been killed during military attempts to recover the location.
Padilla also said militants had used five civilians as human shields when they withdrew from the school.
BIFF members were said to have engaged in a shootout with local military officers before being pushed back and occupying the school.
Chief Insp. Realan Mamon, municipal police station chief, said the armed group traveled from the marsh in nearby Kabuntalan and Northern Kabuntalan towns in Maguindanao and went to Barangay Malagakit in Pigcawayan where they attacked an outpost of the 34th Infantry Battalion. "They have tried to attack a couple of times and all have been thwarted".
The conflict in Marawi City began on May 23 when hundreds of militants went on a rampage after government forces tried to arrest a local Islamic State leader. We're not kidnappers."Both Pigcawayan and Marawi are on the large southern island of Mindanao".More news: Perez says he hasn't spoken to Ronaldo about rumors of exit
The militants involved in the Marawi fighting are mostly from the Maute and Abu Sayyaf organizations, which have united with the BIFF under the IS umbrella, according to the government.
Duterte has said politicians, including some linked to the illegal drug trade, may have covertly backed the militants, who stockpiled arms and supplies before launching their audacious plot in Marawi.
"We have not yet determined kung sino at kung ilan ang na-trap sa area (who and how many are trapped in the area)" by the ongoing firefight he said in a phone patch interview.
Encinas and Padilla said there had also been skirmishes throughout the day outside of Pigkawayan, which is surrounded by marshlands, mountains and farmlands.
He said they led the rescue of these families and brought them to the town's Poblacion, particularly at the multi-purpose building, which is serving as their temporary shelter.
IS has ambitions of setting up a caliphate in Southeast Asia - home to largely Muslim nations like Indonesia and Malaysia - as the group loses territory in Iraq and Syria.