The Philippines began on Friday the "full-blown rehabilitation, reconstruction and rebuilding" phase of war-torn Marawi city in the southern island of Mindanao following the military's claim earlier this week of victory in the five-month battle against Islamic State-inspired terrorists there, an official said.

Maj. Gen. Restituto Padilla, spokesman of the Philippine armed forces, told reporters, "We are now entering into...our long road to normalcy of the city."

Government forces successfully retook the predominantly Muslim city from combined elements of the local Abu Sayyaf and Maute terror groups, aided by some foreign fighters.

The heavy fighting, which started on May 23, left 962 militants, 165 government troops, and 47 civilians dead, and displaced nearly 400,000 people.

Mayor Majul Usman Gandamra described Marawi as totally devastated, especially since the main battle was fought in the commercial center.

Padilla said that as security forces continue to clear the city of "remaining unexploded ordnance, improvised explosive devices, and booby traps" to ensure the safety of returning residents, post-conflict assessment is being undertaken.

The clean-up, including locating and collection of bodies, is also ongoing.

Kristoffer James Purisima of the Office of Civil Defense said a few thousand residents have started returning home, while others whose houses were destroyed will be moved in transitional shelters.

Basic facilities and services, like water and power, are in the process of being restored, he said.

According to Purisima, of the initial P5 billion (around $96.5 million) that the government is allotting this year for the early recovery phase, an estimated P3.4 billion will be spent on health and social services.

The government will disperse another P10 billion in 2018 and P5 billion in 2019.

Many foreign countries including Australia, Japan and the United States as well as international agencies like the World Bank and Asian Development Bank are extending help.

In an earlier interview, Defense Secretary Delfin Lorenzana acknowledged that his initial estimate of 50 billion pesos as the required amount to rebuild Marawi may not be enough, considering the extent of the destruction.