The Abu Sayyaf rebels released three hostages yesterday as "a goodwill gesture" amid growing concern over unverified claims of a private cash-for-freedom ransom deal.

The rebels released former transportation under secretary Francis Ganzon, 50, Kimberly Jao Uy, 13, and cleric Ustadz Muhaymin Sahi Latip, said presidential spokesperson Rigoberto Tiglao.

The military earlier said Latip was dead after coming across a beheaded body in Basilan on June 13, a day after Abu Sayyaf spokesman Abu Sabaya claimed they had beheaded U.S. hostage, Guillermo Sobero.

The three walked for two days in the jungles before they reached the home of Mochtar Mohti in Isabela at midnight on Friday, said Tiglao. Mohti is the son of Basilan Congressman Candu Muarip, who had sent Latip to negotiate.

Uy and Ganzon landed on a Lear jet at Pasay City's Villamor Airbase at 6 p.m. Ganzon said they were treated well, while denying paying ransom. His wife Teresa was freed in Lamitan on June 3 in what many believe paved the way for his release.

Both met President Gloria Macapagal Arroyo who later said on television that no ransom was paid. "It was an unconditional release. It was a goodwill gesture," she said. Newspapers have said Uy's father paid six million pesos ($116,000) for her release, and the family of another hostage Lalaine Chua were attempting to meet a 10 million peso demand, while others said demands varied from $100,000 (P5 million) to $200,000 (P10 million) per hostage.

Uy, the youngest and Ganzon, the oldest of the hostages taken from Dos Palmas in Palawan, in the southern Philippines May 27, leave three U.S. nationals and 23 Filipinos in rebel hands.