More than 200 people are feared drowned after a crowded ferry collided with a cargo ship in the Phillipines.

28 people are already confirmed dead.

The ferry was carrying 870 passengers when it sank near the port of Cebu (PRON: See-boo), the Philippines' second biggest city.

The coast guard said the MV Thomas Aquinas listed and began sinking after hitting the cargo vessel and the captain ordered the ship abandoned.

Coast guard officer Joy Villegas said the collision occurred on Friday evening close to the shore near the central city of Cebu.

Two rescue vessels have been dispatched and other nearby boats were helping to pull passengers from the water.