Philippine President Rodrigo Duterte placed the whole Mindanao region under martial law on Tuesday night, prompted by the occupation of Islamic State-inspired terrorists of a city in the southern part of the country.

Presidential spokesperson Ernesto Abella made the announcement at a press conference in Moscow, Russia, where the Philippine official is accompanying the president for a four-day visit.

"The president has called me and asked me to announce that as of 10pm Manila time, he has already declared martial law for the entire island of Mindanao," he said, adding that the proclamation will last 60 days.

Under the Philippine Constitution, the declaration of martial law empowers the government to conduct warrantless arrests, effectively tightening its hold over a lawless area or a region beset by rebellion during its duration.

Fighters of the Maute terrorist group clashed with government security forces in Marawi City in Mindanao at 2 p.m., after authorities tried to serve an arrest warrant for its leader, Isnilon Hapilon.

Three government troops, which include a police officer and two army troops, were killed in the gunfight with the terrorist group, which also later occupied a government hospital, the city hall, city jail and a part of a university compound in Marawi City.

"The whole of Marawi City is blocked out. There is no light and there (are) snipers, Maute snipers, all around," Defense Secretary Delfin Lorenzana said in the same press conference, citing that military reinforcements from Manila and the nearby province of Zamboanga are on the way.

Philippine Foreign Affairs Secretary Alan Peter Cayetano said Duterte will be cutting short the duration of his stay in Russia because of the incident, and will return to Manila either two or a day earlier than scheduled.

In October last year, operatives of the group were blamed for the twin bombing in Duterte's home city of Davao which killed 15 people, then prompting the Philippine leader to declare a state of national emergency, which was characterized by intensified police and the military campaign to quell crime.