The Philippines has accepted Australia's offer to provide "technical assistance", including sharing counter intelligence, to its security forces to fight Islamic State-allied extremists seeking to gain a foothold in south-east Asia.

But President Rodrigo Duterte has ruled out Australian combat troops being sent to the country where militants have besieged the southern city of Marawi for 101 days, leaving almost 800 people dead.

Presidential spokesman Ernesto Abella said the assistance will be limited to "technical matters, training and information sharing".

"It will not involve boots on the ground in accordance to our law prohibiting the direct participation of foreign troops in combat operations," he said.

"The offer of Australia is most welcome. The fight against terrorism – to reiterate – is not only the concern of the Philippines, but is a concern of many nations around the world."

The announcement came only days after the chief of Australia's overseas spy agency, Nick Warner, was photographed meeting Mr Duterte in his Manila palace.

Australia's Defence Minister Marise Payne told Fairfax Media that no formal agreement has been reached with the Philippines.

"Discussions are ongoing with the Philippine government," a spokesman for her said, adding the minister will visit Manila next week for further discussions with her defence counterpart there. 

Foreign Minister Julie Bishop said on Tuesday she briefed Mr Duterte in Manila this month on the support Australia is giving Iraq, which includes advising and assisting its military, but does not include combat troops.

Australia has 780 defence personnel based in the Middle East.

Similar assistance will now be given to the Philippines.

Two Australian PC-3 Orion surveillance aircraft were deployed weeks ago to provide intelligence to Philippine ground troops as they fight to retake Marawi, on city on Mindanao island.

Mr Abella said the Philippines may also accept offers of assistance from other countries.

US specials forces are covertly providing support for the Philippine troops in Marawi.

Philippine military commanders say they are planning a final assault on about 40 heavily armed militants holding out against ground and air attacks in a cluster of small, mosque-dotted communities in now largely destroyed Marawi.

On the 100th day of the battle on Wednesday, Mr Duterte told reporters he has given the go-ahead for troops to escalate bombing of the militants, prompting even greater fears for several dozen hostages, including a Catholic priest, who have been used as human shields.

"The option is already yours, because we cannot have stalemate for over one year," the president said, referring to security forces.

Mr Duterte said it was hard to issue the order because bombings of mosques and other Islamic centres could "generate more hatred" between Muslims and Christians.

"But it's out of my hands. It has taken too long already," he said.

Mr Duterte has sent an emissary to Marawi in a last-minute attempt to convince the militants to release their captives.   

"Free the hostages. Do not harm them. Do not cut off their heads," he said.

Military commanders suggested weeks ago that mosques where militants were holed up should be targeted but Mr Duterte, a former provincial mayor, ordered them to "wait it out".

Rooftop snipers and booby-trapped buildings also slowed the advance of troops. 

With a population of 300,000, Marawi is the largest Islamic city in the majority Catholic country.