Presidential Assistant for Mindanao Jesus Dureza said the ransom demand was confirmed by Maitum, Sarangani Mayor George Yabes, who had received a letter Tuesday from an emissary of the kidnappers.
Dureza said, however, no payment would be made as the government would be adhering to a strict "no-ransom" policy.
"Our policy stands. There will be no ransom in our efforts for the rescue of the Korean from his kidnappers believed to be hiding somewhere in Palimbang, Sultan Kudarat," he said.
Jae and his Filipino business partner, Carlos Belonio, were abducted last Feb. 6 by suspected members of the Pentagon kidnap gang.
The Pentagon gang, composed of former guerrillas of the separatist Moro Islamic Liberation Front, has been responsible for the abduction of several foreigners, including the recently recovered Italian priest Fr. Guiseppe Pierantoni.
Police said they believe Jae and Belonio were abducted by a group led by former MILF commander Tigre Jikir while the duo had been searching for nickel babbits in an area near the boundary of Maitum and Palimbang towns.
Belonio, owner of two Tierra Verde hotels in this city, was released by his abductors last March 29 in Lalapatan, Sarangani following negotiations between Pentagon emissaries and local government officials.
A total of 13 Pentagon gang members have been killed while eight kidnap victims were rescued after President Arroyo ordered the Philippine National Police to spearhead operations against kidnapping groups in Mindanao.
Dureza recently held a meeting in Malungon, Sarangani with local executives, police and military officials to discuss the rescue operation for the Korean.
During the meeting, Dureza said the kidnappers gave Yabes a voice tape containing their demands, as well as a photograph of Jae and a letter written by the Korean.
He disclosed to discuss in detail the contents of the tape and letter.
Sultan Kudarat Gov. Pax Mangudadatu said there was no time frame set for the release of the Korean, but promised that the hostage would be recovered at the soonest possible time.
"We will get him safely from his abductors by all means," Mangudadatu said.