SWAT teams and ambulances are reported to have been sent to the scene
Gunfire and explosions have been heard near a hotel and casino complex close to the airport in the capital of the Philippines.
One video posted on Twitter showed crowds of people rushing out of Resorts World late at night and in another the sound of shooting could be heard.
Local media reported armed men had entered the complex through a side door and shot guards before taking their weapons.
They are said to have poured a flammable substance on gaming tables, before setting them alight.
Islamic State was swift to say "lone wolf soldiers" from the terror group carried out the attack.
However, the Philippines' police chief said it had been a single gunman armed with an assault rifle and there was no indication the shooting was related to terrorism and it may have been a robbery.
Ronald dela Rosa said police were in control of the situation and it was possible IS said it carried out the attack for its own propaganda purposes.
The fire service said there was a blaze burning on the second floor of the building.
Armed teams of special forces and ambulances are also at the scene.
"Resorts World Manila is currently on lockdown following reports of gunfire from unidentified men," the operators of the hotel complex said on Twitter.
"The company is working closely with the Philippine National Police to ensure that all guests and employees are safe."
We ask for your prayers during these difficult times.— Resorts World Manila (@rwmanila) June 1, 2017
The complex, opposite the Ninoy Aquino International Airport, includes four hotels, casinos, a shopping centre, cinemas, restaurants, clubs and a theatre.
ABS-CBN News reported several injured people had been seen at Resorts World, but there are not official casualty figures yet.
US President Donald Trump said he was closely monitoring what he described as a "terrorist" attack.
The Philippines is currently battling Islamic State militants in the south of the country.