Philippines security officials yesterday dismissed claims by the Abu Sayyaf that it shared its loot from several kidnappings with some military and provincial officials in southern Basilan island.

Rebel leader Abu Sayyaf yesterday contacted radiostation dzRH in Manila and claimed that he gave money, taken from the vault of a hospital in Lamitan town on June 2, to some unnamed officials in exchange for allowing them to slip out of a tight military cordon.

But this was strongly denied by security officials who dismissed Sabaya's claim as more propaganda aimed at destroying the credibility of the military, which has mounted a massive offensive against the rebels in Basilan and Sulu provinces.

The Abu Sayyaf is holding 18 Filipino and U.S. hostages in Basilan's jungle and have been demanding a stop on the government offensive in the largely Muslim province, several kilometres south of here.

Lamitan priest Fr. Cirilo Nacorda has accused Army Brig. Gen. Romeo Dominguez, the then western Mindanao military chief, and five other officials, of colluding with the Abu Sayyaf.

Dominguez has denied the charges and said he would file libel charges against his accuser.

On June 2, rebels raided the Jose Torres Memorial Hospital and St. Peter's Church in Lamitan town and held more than 200 people hostage, but freed them later after they escaped through a small door at the back of the hospital. Nacorda is St. Peter's Church parish priest.

"We deny all allegations of the military colluding with the terrorists. We deny any Abu Sayyaf statement insinuating a connivance between the Armed Forces of the Philippines and the terrorists," said Col. Fredesvindo Covarrubias, commander of the military Civil Relations Group (CRG).

"The terrorists have made up all the accusations because these are propaganda aimed at destroying the integrity of the military and the officers and soldiers who are involved in operation against the Abu Sayyaf in Mindanao.

The terrorists will continue to fabricate stories and lies, but the public will never believe this propaganda – incredible and baseless." Senator Ramon Magsaysay, chairman of the House committee on defence, arrived in Zamboanga City yesterday to meet with Nacorda to discuss the priest's allegation.

The Senate and Congress would conduct a separate inquiry into Nacorda's accusation. But the priest has ignored an invitation for him to go to Manila and face senators who would investigate his claims.

Nacorda, who was kidnapped by the Abu Sayyaf and escaped his captors in the 1990s, said some former hostages told him that they heard Sabaya talk to some military officials over a cellular phone inside the hospital. He also accused some sectors in the military of selling pilfered arms to the Abu Sayyaf.

Two former hostages, Francis and Tereza Ganzon, who were among the 20 holidaymakers seized by rebels at Dos Palmas resort in Palawan province on May 27, denied Nacorda's allegation, saying they did not hear nor see Sabaya speak on his cellular phone inside the hospital.