Zamboanga City police chief Senior Superintendent Francisco Cristobal said the suspects were freed on orders by assistant city prosecutor Czar Ciro Sedillo because smuggling charges were filed against them without a preliminary investigation by the prosecutors office.
The smuggling charges remained, however, and the suspects may be rearrested.
Freed were skipper Felix Inojaldo, crewmen Jul Sawadjaan, Almagdar Jailani, Salam Addah, Melchor Cabale, and Police Officers 1 Elias Rajad and Abdulnajar Dahimuddin.
Cabale, however, was rearrested in a separate and unrelated case for running amuck and hacking his wife and his son last Tuesday. The wife is in critical condition. The reason for the attack was not immediately known.
Two police officers who escorted the M/V Katrina 3 and were arrested with the ships captain and four-man crew were also released. However, they will face administrative proceedings for their involvement.
The vessel sailed from Jolo, Sulu, where hundreds of government troops are trying to flush out Abu Sayyaf leader Khadaffy Janjalani and two Indonesian terrorist suspects.
Authorities suspect that the ammonium nitrate was meant for an Abu Sayyaf or Jemaah Islamiyah terrorist bombing campaign although there has been no evidence of this so far.
"We are not letting our guard down against any possibility of these terrorists making an attack," Cristobal said.
Security forces in the province were earlier put on alert ahead of next months Fiesta Pilar religious festival in Zamboanga City.
Freed were skipper Felix Inojaldo, crewmen Jul Sawadjaan, Almagdar Jailani, Salam Addah, Melchor Cabale, and Police Officers 1 Elias Rajad and Abdulnajar Dahimuddin.