The Abu Sayyaf has released three hostages, one of them was identified as Luis Bautista who was taken in Dos Palmas resort in Palawan, southwestern Philippines on May 27, a source said. The two others were Shiela Tabunyag and Deborah Yap, who were taken together with two other medical workers from the Jose Torres Memorial Hospital in Lamitan, Basilan on June 2.

The three will be turned over to some intermediaries in Isabela, capital of Basilan today. They were freed in Basilan, from the jungle lair of the group, and it would take them a day to walk to the place where they were to be met by government authorities, said a source.

The Abu Sayyaf lowered their ransom demand of $100,000 and $200,000 (P5m and P10m) per head to P500,000 for each of the four hospital workers who were taken to attend to some of the hostages and bandits who were wounded during a clash between government soldiers and the Abu Sayyaf.

But Armed Forces spokesman Brig-Gen Edilbertom Adan said, "We have no reports about the release." Meanwhile in Tripoli, the Philippines government and the separatist Moro Islamic Liberation Front (MILF) signed a peace accord yesterday that should lead to a ceasefire and a political end to their conflict, an official Libyan source said.

The deal was signed by Vice President and Foreign Minister Teofisto Guingona and Moham-mad Murad, the military head of the MILF.