The Philippine government said on December 24 that more than 600 passengers have been rescued after ferry MV Trans Asia South Korea sank Thursday morning near Cebu in the central Philippines.

Orlando Mercado, defense secretary and chairman of the National Disaster Coordination Council, also said that 10 people have been confirmed dead in the mishap while 38 are still missing.

Philippine Presidential Palace said earlier that the ship, with 578 passengers and 52 crew members on board, left Cebu City at 23: 00 (15:00 GMT) Wednesday for Iloilo City and capsized at 5:30 Thursday(21:30 GMT, Wednesday).

However, Trans-Asia Shipping Lines, owner of the ill-fated ferry,said the ship carried 606 passengers and 56 crew members when it left Cebu port.

Rescuers raced against time Friday to rescue 40 survivors clinging to floating debris in the Visayan Sea more than 30 hours after the ferry sank off the coast of Bantayan Island, some 10 nautical miles off the northernmost tip of Cebu.

Mel Capistrano, administrator of the Office of Civil Defense in Cebu region, said the 40 survivors still at sea were spotted by helicopters of the Philippine Air Force and Philippine Navy as of 12:00 (4:00 GMT) Friday.

Capistrano said rescue operations have been intensified to find more survivors that may be at sea or washed away to seashores in several islands and islets in northern Cebu.

He said the fatalities could have been high had the survivors not been rescued immediately by three inter-island ships and some fishermen who were fishing the area where the ill-fated 2,840- gross ton ferry sank.

Big waves have hampered rescue work but the government said rescue operations will not stop until all passengers and crew members on board the ill-fated ferry are accounted for.