MANILA - (UPDATED) Two Malaysian sailors held hostage by Abu Sayyaf extremists for nearly a year were released on Thursday, in what the military said was a rescue.

The two were recovered in an operation by Marine troops in the marshland village of Carudong in Sulu, on the Philippines' southwestern tip at around 2 a.m., said military spokesman Colonel Edgard Arevalo.

The hostages were among 5 Malaysians seized on their tugboat off Lahad Datu in Malaysia last July. Abu Sayyaf had demanded P100 million for their release, according to news reports from Malaysia.

"There was no ransom paid, malinaw po ito na sila ay na-rescue. Sa katunayan, nakita ang 2 sa marshland na takot na takot, pagod na pagod ang kanilang itsura," Arevalo told ANC.

(The 2 were seen in a marshland looking very scared and very tired.)

The troops were dispatched to the area after villagers tipped them off on the presence of some 30 Abu Sayyaf fighters and at least 5 hostages.

Arevalo said the bandits fled when the soldiers arrived, leaving behind the hostages Fandy Bin Bakran, 26 and Abdul Rahim Bin Summas, 62.

The Malaysians will be brought to Camp General Teodulfo Bautista on Jolo Island for debriefing, Arevalo said.

The group is believed to be holding 29 other hostages, including foreign nationals, said army spokesperson Brig. Gen. Restituto Padilla.

Abu Sayyaf, which means "bearer of the sword", has capitalized on decades of instability in the southern Philippines and generated tens of millions of dollars from piracy and ransom payments.

It uses the money to buy arms, high-powered boats and modern navigation equipment, allowing it to avoid detection and seize crew of slow-moving vessels with ease.

The group's activities in recent years have been mainly banditry, but the Philippines believes Islamic State has been in contact with members of the group's leadership with a view to gaining a foothold in Southeast Asia. -- With Reuters