Hotel guests have been evacuated but several journalists remained inside the building, despite warnings from government authorities to leave for their own safety.
Earlier on Thursday the rebel soldiers stormed out of court in central Manila where they have been on trial over a failed coup attempt in 2003 and demonstrated on the streets before marching to the Peninsula hotel.
|Troops and armed police have surrounded
the Peninsula hotel [AFP]
The accused were among 300 soldiers who took over a hotel and mall in July 2003 demanding the resignation of the president.
Calling a press conference shortly after seizing the hotel, one of the soldiers on trial, Brigadier Danilo Lim, a former commander of the elite Scout Rangers unit, said the group was taking control of the government.
“We make this fateful step of removing Mrs Macapagal Arroyo from the presidency and undertake the formation of a new government,” he said.