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(2nd UPDATE) - An Italian restaurant owner and retired priest who was abducted in Dipolog City in October 2015 was freed on Friday in Jolo, Sulu, police said.

Rolando Del Torchio was recovered by police at the Jolo port Friday night, the Philippine National Police (PNP) said.

Del Torchio was inside the boat MV KC Beatrice bound for Zamboanga City when he was recovered by a joint police, Coast Guard, and military team. It is not clear yet how he ended up on board the passenger vessel.

PNP spokesperson Wilben Mayor told AFP that Del Torchio was in poor health.

"The... team decided to bring the kidnap victim to the Trauma Centre (a local military hospital) where he will be taken care of by a military doctor," Mayor said.

The Italian foreign ministry released a statement on Friday confirming Del Torchio's freedom and thanking local authorities for their help.

"Italian national Rolando Del Torchio... was released today and is currently in the custody of the Philippine authorities," the statement said.

"The foreign ministry thanks the Manila authorities for their excellent cooperation and commitment, which permitted the release of the Italian national."

Gunmen snatched Del Torchio, then 56, at gunpoint at his pizza restaurant on the city of Dipolog, about 400 kilometers northeast of Jolo, in October last year.

Del Torchio had worked as a missionary for the international organisation PIME in the south from 1998 before retiring in 2000 to set up his restaurant, colleagues told AFP shortly after he was abducted.

LOCAL CRIMINAL GANG

Police earlier said they had identified a local criminal gang behind the abduction of Del Torchio that shocked the dinner-time crowd at his pizzeria.

Senior Superintendent Cleve Taboso said they had identified the gang's boss, known as "Commander Red Eye," and four of his relatives, based on closed-circuit television (CCTV) camera footage of the abduction.

The footage shows armed men shoving their captive as well as several restaurant patrons out of the pizzeria's door as they flee the scene.

"Red Eye" had been arrested for another abduction in 2014 but managed to post bail, according to police.

His criminal gang is still believed to be in the southern peninsula of Zamboanga despite earlier fears they had fled to Jolo island.

According to the Western Mindanao Command (Wesmincom), the victim was turned over by the gang to Abu Sayyaf sub-leader Idang Susukan.

The Abu Sayyaf, established in the early 1990s with seed money from Osama bin Laden's Al Qaeda network, has been blamed for the worst terror attacks in the Philippines.

Many smaller kidnapping groups have often taken their hostages to the thickly-forested island of Jolo to hand them over to the Abu Sayyaf who ransom them off for huge sums.

The Abu Sayyaf is believed to be currently holding nearly 20 other foreigners. Its leaders have in recent years pledged allegiance to the Islamic State group that controls vast swathes of Iraq and Syria.

RANSOM PAID?

A military official who requested anonymity said ransom was paid to the kidnappers of Del Torchio.

The source, however, did not disclose how much was paid and who paid for the ransom.

The Wesmincom earlier said it would uphold the no-ransom policy of the government in dealing with kidnapping cases involving foreign nationals. - With reports from RJ Rosalado and Raiza Dapilin, ABS-CBN News Zamboanga; Agence France-Presse