Fire broke out in the engine room of the M/V Our Lady of Fatima near the port of Dumaguete City off the southern tip of Negros island shortly before midnight Sunday, said Chief Petty Officer Vicente Ruba of the Cebu Coast Guard.
He said the crew quickly brought the blaze under control just before dawn and the ship was able to continue its voyage with one engine running. He said a vessel was sent to escort the ferry to Cebu.
The extent of the damage was not immediately known. No one among the people on board, including 525 passengers, was injured, the Coast Guard said.
It was not clear how the fire started, Ruba said, adding that a probe would be conducted.
"The fire was quickly contained by the crew and there was no need for assistance or a rescue operation," said Navy spokesman Cmdr. Geronimo Malabanan said.
Last month, a bomb hidden in a cardboard box aboard the ferry M/V Doña Ramona docked at the Lamitan pier in Basilan killed four people and wounded 26 others. President Arroyo blamed terrorists, with officials accusing the al-Qaeda-linked Abu Sayyaf.
The Abu Sayyaf claimed responsibility for the countrys worst terror attack in February last year, when a bomb explosion aboard the SuperFerry 14 off Corregidor caused a fire that killed 116 people. With AP, AFP