Philippine troops have found the final five bodies after a transport aircraft crashed in the south, raising the death toll to 50 in the country's worst military air disaster.

The Lockheed C-130 Hercules aircraft was carrying 96 mostly combat troops when it overshot the runway while landing on Sunday at the Jolo airport in Sulu province, military officials said.

The plane slammed into a coconut grove beyond the airport and burst into flames in a disaster witnessed by horrified soldiers and villagers.

Troops, police and firefighters rescued 49 military personnel, including a few who jumped off the aircraft before it exploded and was gutted by fire.

Seven people on the ground were hit by aircraft parts and debris, and three of them died, the military said.

The Lockheed C-130 Hercules was one of two refurbished US air force aircraft handed over to the Philippines, Washington's oldest treaty ally in Asia, as part of military assistance this year.

The aircraft had earlier carried two-star Gen Romeo Brawner Jr, his wife and three children from Manila to southern Cagayan de Oro city, where he is set to become the new military regional commander on Monday.

Those who boarded the C-130 in Cagayan de Oro for the flight to Sulu were army troops, many of them newly trained recruits, to be deployed in the battle against Abu Sayyaf militants in the south.

Gen Brawner was stunned to learn the plane he had just flown on had crashed. He told the Associated Press: "We're very thankful that we were spared, but extremely sad that so many lost their lives."

A video taken by troops showed the aircraft landing in clear weather then vanishing beyond the airport.

Dark grey smoke can then be seen billowing from the crash site in a wooded area.

Sulu military commander Maj Gen William Gonzales said of the dead: "They were supposed to join us in our fight against terrorism."

Government forces have been battling Abu Sayyaf militants in the predominantly Muslim province of Sulu for decades.

It is not immediately clear what caused the crash and investigators are looking for the C-130's black boxes containing the cockpit voice and flight data recorders.

Regional military commander Lt Gen Corleto Vinluan said it was unlikely that the aircraft took hostile fire.

Military chief of staff Gen Cirilito Sobejana told reporters on Sunday that "the plane missed the runway and it was trying to regain power but failed and crashed".

An air force official told The AP that the Jolo runway is shorter than most others in the country, making it more difficult for pilots to adjust if an aircraft misses the landing spot.

President Rodrigo Duterte expanded the military presence in Sulu to a full division in late 2018, deploying hundreds of additional troops, air force aircraft and other combat equipment after vowing to wipe out Abu Sayyaf.

The small but brutal group has been blacklisted by the US and the Philippines as a terrorist organisation for ransom kidnappings, bombings and beheadings.

Before Sunday, the Philippine air force's deadliest disaster was a crash in a rice field north of Manila in 1971 that killed 40 military personnel, military historian Jose Custodio said.

A recently delivered S-701 Blackhawk helicopter crashed more than a week ago near Clark freeport, a former US air base, killing all six air force personnel on board.

The Philippine government has struggled for years to modernise its military, one of Asia's least equipped, as it dealt with decades-long Muslim and communist insurgencies and territorial rifts with China and other claimant countries in the South China Sea.