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The military blamed Islamist militants of the Abu Sayyaf group for the attack.
They said as many as 50 men armed with assault rifles opened fire on two vans in an ambush before dawn in the town of Talipao on the island of Jolo.
Abu Sayyaf operates out of jungle hideouts on Jolo in its fight for an Islamic homeland.
Army spokesmen said they suspected a clan feud between rival factions, which could lead to further revenge attacks.
They said that some of those killed were members of a civilian defence group that had been working with the military in its offensives against the rebel strongholds.
Villagers had packed into the two vans and were on their way to meet relatives to celebrate the end of Ramadan when they were attacked.
Reports said that women and children were amongst those killed and wounded in the attack.
Abu Sayyaf is known for its abduction of foreigners and ransom demands, and for its use of violence against the civilian population.
It has been excluded from peace negotiations which led to the signing in March of an accord between the government and the much larger separatist group, the Moro Islamic Liberation Front.
The government estimates that some 300 Abu Sayyaf fighters remain, operating in various factions.
http://www.bbc.com/news/world-asia-28524068