Initial information disclosed that MV Mama Mary was on its way to Bato, Leyte from Ubay, Bohol when fire struck the vessel.
Witnesses claimed that smoke was seen from the vessel around noon and reportedly sank around 2 p.m.
Some passengers, including children, were seen jumping into the sea to escape the vessel.
They were rescued by nearby boats. Other rescued passengers were taken to Hilongos, Leyte.
The Philippine Coast Guard has yet to release the cause of the fire.