A police SWAT team had to use explosives on Saturday to blast open the door where the two men had barricaded themselves inside the tower, Superintendent Andres Caro said. The men were said to have been armed with handguns, a grenade and other explosive devices.
"We are being killed here," Panfilo Villaruel, a former head of the Air Transport Office, said on live radio as shots and groans were heard in the background. "We surrender."
While the incident appeared to be a personal protest against corruption, the takeover of the tower at the country's busiest airport sparked fears of a repeat of an attempted coup by several hundred elite soldiers in July.
Police were put on nationwide red alert. Fire trucks blocked the gates of Philippine National Police headquarters and security was tightened at the main armed forces camp in Manila.
"Everything is under control," National Security Adviser Roilo Golez said in a live television interview. "The first flight is landing in a few minutes."
President Gloria Macapagal Arroyo vowed on Friday to put down any new destabilisation plots.
The seige occurred late Friday
Villaruel entered the tower at Ninoy Aquino International Airport just before midnight on Friday and told employees to leave, aviation and airport security officials told Reuters.
The last flight of the night was allowed to depart before the tower lights were switched off and its phone hotline cut.
Police officials said the SWAT team had to storm the tower because there was a flight from the United States due before dawn. The other dead man was identified as Richard Gatchalian.
Villaruel, a former pilot and air force officer, earlier told radio he was fed up with corruption in the government and that he was representing Filipinos who were scared to speak up.
"We are not terrorists," he said. "If I don't do this, there will never be any change in the way the government is run."
'Very corrupt country'
The Philippines is consistently ranked as one of the world's most corrupt countries, on a par with Pakistan and Zambia.
"He loved this country very much and he was heartbroken over the GMA (Arroyo) government and the corruption going on right now"
Former Transport Ministry official
Josephine Lichauco, a former Transport Ministry official who knew Villaruel, said on television he had often voiced concerns to her about widespread corruption. She also questioned whether police needed to kill the two men to end the siege.
"He loved this country very much and he was heartbroken over the GMA (Arroyo) government and the corruption going on right now," she said.
Sources at the Defence Department told Reuters that Villaruel had tried several times without success to meet Defence Secretary Eduardo Ermita to air his grievances about corruption.
A spokesman for Philippine Airlines said one plane from Vancouver, Canada was diverted to the southern city of Cebu but that all other domestic and international flights were operating normally.
Departing passengers were forced to walk with their luggage from the airport gates to the terminals as police combed the area with bomb-sniffing dogs.