Southern Leyte Gov. Rosette Lerias said one person fell overboard and when others in the boat rushed to one side to see what had happened, the boat capsized.
The still undetermined number of passengers, many of them children, were thrown overboard.
Although the accident occurred in good weather, many of the victims were unable to reach shore due to injury or strong currents, Lerias said.
The religious procession was meant to honor the Infant Jesus during the annual festival of the Sto. Niño, she said.
Eastern Visayas police director Chief Superintendent Eliseo de la Paz said the incident occurred at around 9 a.m. while the MB Sun J was about a kilometer away from Barangay Inolian in San Ricardo town.
De la Paz said the fatalities were not immediately identified as police and local government authorities were still trying to retrieve the boat from the water. He said there could still be people trapped in the boat.
Coast Guard personnel and Army rescue contingents, including soldiers in two helicopters, were en route to the accident site in San Ricardo yesterday afternoon to help in the search, according to officials.
Lerias, who was directing rescue operations from Manila, said local officials in San Ricardo had reported at least 16 people dead. She said it was difficult to determine how many were missing because there was no boat passenger manifest.
De la Paz said six people were rescued while a number of parents were still looking for their children. The injured were taken to the municipal hospital in Pintuyan, also in Southern Leyte.
A police officer, Sam Llanes, told radio dzBB that he counted at least 15 bodies in a hospital in nearby Pintuyan, where most victims were brought by villagers.
"I was told that there were many more who have not yet been found," he said. Many of those thrown into the water were children, a local official told dzBB.
The tragedy should prompt officials to strictly enforce safety rules during similar public celebrations, specially in far-flung rural regions, Lerias said.
"We can’t stop traditions but this is a wake-up call," she told The Associated Press by telephone. "Children shouldn’t be allowed aboard these boats because they’re the most helpless when accident strikes."
Witnesses said the boat was about to return to shore when it suddenly tilted and eventually capsized. It was the first time that tragedy struck the annual fluvial parade celebrated every Jan. 15.
The wooden boat was part of the 15-boat flotilla that participated in the sea procession.
Boat accidents are common in the Philippines because many ferries used in inter-island travel are old and poorly maintained and there is weak enforcement of sea safety regulations.
The Philippines is the only country in the world that celebrates the Feast of the Child Jesus. Last Jan. 9, two people died in a stampede during the observance of the miraculous image of the Black Nazarene in Quiapo, Manila.
Meanwhile, in Butuan City, another Sto. Niño festivity was marred by rains when a street dancing parade called Kahimunan Festival was about to start at noon yesterday.
Thousands of devotees who flocked at the Butuan City Sports Complex built during the incumbency of former Butuan City representative. Charito "Ching" Plaza, were dismayed by the strong downpour. — AP, Cecille Suerte Felipe, Ben Serrano, Miriam Garcia Desacada