Police were reportedly pursuing the gunmen, who appeared to be using the hostages as human shields to escape after a clash with authorities in a nearby village on
Al Jazeera's Marga Ortigas, reporting from Manila, said it was unclear what the group wanted although police say there is no political or religious motive for the kidnapping.
She said the group was known to local police having been armed by the Philippines government a decade ago to fight against communist insurgents in the area.
The group is similar to the force suspected by authorities of carrying out last month's massacre of 57 political activists and journalists in a nearby province, also on the island of Mindanao.
Jaime Milla, a local police official, told the Associated Press the gunmen believed to be behind Thursday's kidnappings were former militiamen who had been dismissed and turned to banditry and extortion.
He said the gang was known to have previously targeted mining and logging companies in Agusan del Sur and nearby provinces.
Our correspondent said that last month's massacre and now Thursday's kidnappings had many Filipinos questioning whether it was a good idea to arm these groups in the first place, when the army should have been fighting the insurgents.
"People are saying this was a monster the government had created, and it's now come back to bite them," she said.