The group, estimated at 200 with dozens believed to be armed, landed by boat near the Borneo town of Lahad Datu in Malaysia's Sabah state from the neighbouring Philippines on Tuesday.
Police say the group has declared itself followers of a former Philippine-based Islamic sultanate that once controlled parts of Borneo, including the standoff site, and is refusing to leave Malaysian territory.
Philippine President Benigno Aquino's spokeswoman Abigail Valte said Saturday the safety of the Filipinos was the government's main concern as Malaysian armed forces and police have locked down the area.
"The primary concern now is their safety and to resolve the incident peacefully," Valte said in a radio interview in Manila.
She said the Philippines had received assurance from Malaysia that the government would encourage the group, which Manila has yet to identify, to leave the area peacefully.
Sabah police chief Hamza Taib was quoted by local dailies as saying police were in negotiations with the group and expected the stand-off to be resolved "very soon with the group returning to their home country".
Malaysian police have set up a series of road blocks along the route leading from Lahad Datu through palm oil plantations to the remote village where the gunmen are. Marine police were also patrolling the sea.
An AFP photographer was denied access some 20 kilometres (12 miles) from the stand-off site.
The group involved in the impasse has claimed to be adherents of the former Sulu sultanate, a regional power centre until its demise a century ago.
A Philippine military official, who spoke on condition of anonymity, told AFP Friday the group was demanding an increase in the nominal amount Malaysia pays, under a long-standing agreement, to the heirs of the sultanate for possession of Sabah.
Sabah has a history of incursions by armed Philippine groups, and the prickly situation could test ties between the neighbours, who are fellow members of the Association of Southeast Asian Nations (ASEAN).
In the worst incident, guerrillas of the Islamic militant Abu Sayyaf movement seized 21 mostly Western tourists at the Sabah scuba diving resort of Sipadan in 2000. They were taken to Philippine islands and later ransomed.-Yahoo Philippines (February 16, 2013 5:00PM)
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