A Japanese aid official offered assurances on Monday that assistance for projects in the restive southern Philippines is not being misused or diverted to militants.

Naoyuki Ochiai, who heads the Japan International Cooperation Agency's office in the city of Cotabato, on Mindanao island, told Kyodo News in Manila that JICA-disbursed funds from Japan's official development assistance program are directly given to different agencies of the Philippine government.

Ochiai said local government agencies know best when it comes to subcontracting the projects funded by the Japanese government.

His statement follows a recent newspaper report that millions of dollars in Australian development aid may have been unwittingly channeled to an Islamist militant group that took over parts of Marawi City, on Mindanao Island, earlier this year.

On Nov. 11, The Weekend Australian published a story titled "AusAID cash went to Marawi terrorist," suggesting that one of the Maute militant leaders responsible for the deadly siege was paid "potentially millions of dollars."

It said a local construction firm associated with him was hired by Habitat for Humanity, a subcontractor, to help build classrooms under A$12.7 million (US$9.6 million) scheme funded through AusAID, a former agency of the Australian government.

However, a spokesman for Australian Foreign Minister Julie Bishop was quoted as saying there was no allegation of illegal activity or findings that money had been diverted from the school project.

On Saturday, presidential spokesperson Harry Roque told reporters that the government intends to "look into this allegation that AusAID fund was sent to Maute."

Maute fighters took over parts of Marawi on May 23, resulting in a five-month battle with government troops that reduced much of the city to rubble and left over 1,000 people dead, mostly militants.

Japan is the top donor of development funding to the Philippines.