The M/V Señor San Jose was sailing from the Cebu port at about 11:50 a.m. and failed to change course when its engine stalled, causing it to collide into the approaching M/V Sea Merchant, a cargo vessel.
All 65 passengers of the 498.72-gross ton San Jose were rescued and there were no reports of any casualties, Lt. Antonio Wasito, Coast Guard spokesman, said.
"All passengers were rescued. All 65 people aboard are safe," Wasito said over radio station dzBB.
He did not say how many were aboard the 248.84-gross ton cargo ship, but said there were no casualties.
Coast Guard personnel, on board search and rescue vessels AU-001 and DF-330, immediately rushed to the collision site at Banto Linao Point off Mactan Island.
Coast Guard divers inspected the bottom hulls of both vessels to determine the extent of damage.
San Jose had a one-meter by two feet dent on the astern near the rudderpost, while Sea Merchant had a four-meter dent and a hole at the portside amidship.
San Jose is owned and operated by San Juan Shipping Corp., while Sea Merchant is owned by Fortune Sea Carrier Inc. — AFP