The army would not immediately confirm whether the head was that of one of four people for whom the al Qaeda-linked Abu Sayyaf had demanded a ransom. They are two Canadian men, one Norwegian man and a Filipino woman, who had appealed in a video for their families and governments to secure their release.

"We are being very careful, we can't say whose head it was," army spokesman Major Felimon Tan told reporters, adding that tests would be carried out to identify the victim.

Residents found the head in the centre of Jolo town. Tan said two men on a motorcycle were seen dropping a plastic bag containing the severed head.

He said Abu Sayyaf militants had threatened to behead one of four captives on Monday if the 300 million pesos ($6.4 million) ransom for each of them was not paid by 3 p.m. local time.

The initial demand was one billion pesos each for the detainees, who were taken hostage at an upscale resort on Samal Island on Sept. 21.

The army received intelligence that Abu Sayyaf had carried out an execution outside Patikul town on Jolo island, a known rebel stronghold.

"We don't know who was executed," Tan said.

Abu Sayyaf is a small but brutal militant group known for beheading, kidnapping, bombing and extortion in the south of the mainly Catholic country.

It decapitated a hostage from Malaysia in November last year on the same day that country's prime minister arrived in Manila for an international summit. Philippine President Benigno Aquino ordered troops to intensify action against the militants.

Security is precarious in the southern Philippines, despite a 2014 peace pact between the government and the largest Muslim rebel group that ended 45 years of conflict.

Abu Sayyaf is also holding other foreigners, including one from the Netherlands, one from Japan, four Malaysians and 14 Indonesian tugboat crew.