DAVAO - SEVEN suspected members of an extortion gang have been shot dead by police in the southern Philippine island of Mindanao, an official said on Wednesday.

The seven men, all former Muslim separatist rebels, were killed in a gun battle with police in Pantukan town in Compostela Valley on Tuesday, said Senior Superintendent Francisco Villaroman.

Police were investigating the suspects for allegedly trying to extort money from local officials, businessmen and residents, he said.

A policeman was also wounded in the gun battle.

Three grenade launchers and various rifles were recovered from the scene.

Philippine police have come under increased scrutiny following a number of street shoot-outs where criminal suspects and bystanders have been shot. -- AFP