A Malta-registered cruise ship with 1,000 people on board that was disabled by a fire and was drifting in southern Philippine waters has been repaired and is headed towards Malaysia, the Philippine coast guard has said.

The Azamara Quest informed the coast guard that its power and propulsion had been restored and it was moving slowly toward Sandakan, its next destination after it left Manila on Thursday, spokesman Lt Cmdr Algier Ricafrente said.

A coast guard vessel sent to assist the cruise liner reported that it had sighted the ship from about 9km away and was approaching it.

The ship's captain earlier said by email to the coast guard that it needed no assistance and that everything was "under control".

Lt Cmdr Ricafrente said that the coast guard will provide assistance to the vessel "while it is inside our area of responsibility".

A fire broke out on the ship on Friday night.

The flames engulfed one of the ship's engine rooms but were quickly extinguished, Azamara Club Cruises said in a statement.

Five crew suffered smoke inhalation, including one who was seriously injured and needed hospital care.

The stricken ship was drifting on Saturday in the Sulu Sea about 130km south of the Philippines' Tubbataha Reef, Lt Cmdr Ricafrente said.

The area lies between the Philippines and the island of Borneo, which is divided between Malaysia and Indonesia.