The Canadian government has "compelling reason to believe" that one of its citizens kidnapped by Islamic militants in the southern Philippines nearly nine months ago has been killed, Prime Minister Justin Trudeau said Monday.

"It is with deep sadness that I have reason to believe that a Canadian citizen, Robert Hall, held hostage in the Philippines since September 21, 2015, has been killed by his captors," Trudeau said in a statement.

Members of the notorious kidnap-for-ransom Abu Sayyaf gang had said they would murder Hall if they did not receive 300 million pesos ($6.5 million) ransom by Monday.

"While Canadian officials are working closely with authorities in the Philippines to formally confirm Mr. Hall's death, we have compelling reason to believe that reports to this effect are, unfortunately, true," Trudeau said.

"The vicious and brutal actions of the hostage-takers have led to a needless death. Canada holds the terrorist group who took him hostage fully responsible for this cold-blooded and senseless murder."

Hall was among four people abducted in September last year from aboard yachts at a tourist resort in the southern Philippines.

Another Canadian who was abducted at the same time, John Ridsdel, was beheaded in April after a similar ransom demand of 300 million pesos was not paid.

In the Philippines, authorities would not confirm Hall had been killed.

"No formal report has reached me. I cannot confirm that," regional military spokesman Major Filemon Tan told AFP.

The fates of the two other people abducted at the resort on Samal island -- Hall's Filipina girlfriend Marites Flor and Norwegian resort manager Kjartan Sekkingstad -- were not known.

Listed by the United States as a terrorist organisation, the Abu Sayyaf is a loose network of Islamic militants that was founded in the early 1990s with money from Osama bin Laden's Al-Qaeda network.

It is regarded as one of the most radical offshoots of a Muslim separatist insurgency in the south of the mainly Catholic Philippines that has claimed more than 100,000 lives since the 1970s.

- Lucrative kidnap business -

The Abu Sayyaf is believed to have just a few hundred armed followers but authorities regard it is as one of the most dangerous terrorist groups in the Philippines.

Its leaders have in recent years declared allegiance to the Islamic State group that holds vast swathes of Iraq and Syria.

But security analysts believe the leaders are chiefly focused on getting money from kidnappings-for-ransom rather than waging a religious war.

Abu Sayyaf gangs have earned many millions of dollars from kidnapping foreigners and Filipinos since the early 1990s.

Philippine President Benigno Aquino vowed after Ridsdel's death that security forces would "neutralise" the Abu Sayyaf, but a fresh offensive involving thousands of troops apparently had little impact.

The Abu Sayyaf has for years withstood repeated military offensives against it, surviving by using the mountainous, jungle terrain and support of local Muslim communities to its advantage.

From 2002-2014, the US deployed Special Forces advisers to train and provide intelligence to Filipino troops, which led to the killing or arrest of many Abu Sayyaf leaders.

But the Abu Sayyaf went on a sustained kidnapping spree after the Americans left.

The Abu Sayyaf has abducted 44 Filipinos and foreigners since last year in at least 16 separate incidents, according to Pacific Strategies and Assessments, a regional risk assessment organisation.

The Abu Sayyaf was reported to have earned hundreds of thousands of dollars for the kidnapping and release of 18 Indonesian and Malaysian sailors in recent months.

One of the Abu Sayyaf's biggest recent windfalls is believed to have come in 2014 when it claimed to have been paid more than $5 million for the release of a German couple abducted from aboard their yacht in the southwest Philippines.