The Philippine president has said Abu Sayyaf militants that beheaded a Canadian tourist plotted to kill him and kidnap eight division world champion Manny Pacquiao.

President Benigno Aquino III said the Muslim extremists who murdered John Ridsdel on Monday also wanted to explode bombs in metropolitan Manila to try to get funding from ISIS.

However their plot was foiled when the plans were uncovered, while troops have also reduced the terrorists' ability to inflict harm.

Aquino, whose six-year term ends in June, vowed 'to devote all my energies' to ensure that the extremists would be 'at the very least... a very seriously degraded problem' for his successor.

“They allegedly even hatched plots to kidnap Manny Pacquiao or one of his children, as well as my sister Kris or one of her children, with the plan to use them in bargaining for the release of their cohorts. Threats against my own life have been investigated,” Aquino said.

“We have monitored their activities, unraveled their network and arrested key players, while some of the minor players already on the run are being hunted down. I credit our security services for putting these threats to bed with both professionalism and discretion. The public may rest assured that they may go about their daily lives without fear or unease."

While he has forged a peace pact with a larger Muslim rebel group, Aquino said there is no possibility of engaging in talks with the brutal Abu Sayyaf, which is accused of beheading Ridsdel on Monday in southern Sulu province.

'We have always believed in the power of dialogue, development and positive engagement over arms,' Aquino said.

But he said of Abu Sayyaf: 'You have chosen only the language of force and we will speak to you only in that language.'

Ridsdel, 68, was beheaded after the Abu Sayyaf did not receive a large ransom it had demanded by a Monday deadline.

A fellow Canadian Robert Hall, a Norwegian and a Filipino woman who were kidnapped with Ridsdel from a southern marina in September are still being held by the militants, along with about 20 other foreign hostages.

Two men on a motorcycle left Ridsdel's head, placed inside a plastic bag, along a street in Jolo town in Sulu province and then fled.

A headless body of a Caucasian man was also found by villagers in a mountain clearing in Sulu and police forensic experts were checking Wednesday if it was that of the former mining executive.