A long, slow procession of coffins draped in the Philippine flag poured out of military transport planes in Manila on Thursday, as the country mourned dozens of policemen killed in a botched anti-terror operation.

Marching to muted drums, uniformed commandos bore the numbered coffins of comrades brought home from the southern island of Mindanao, the scene of the worst loss of life by the country's police or troops in recent memory.

President Benigno Aquino has declared Friday a day of mourning for the 44 men slaughtered in a cornfield Sunday when their top-secret mission -- to catch or kill one of the world's most wanted Islamist militants -- went badly wrong.

The killings have sparked growing calls for retribution. Analysts warn this threatens a peace process aimed at ending the decades-long armed conflict that has claimed tens of thousands of lives in impoverished Muslim regions of the mainly Catholic Philippines.

Relatives wept and hugged each other as a priest sprinkled holy water on the metal caskets, which were laid at an air base in front of a large national flag at half-mast. Cabinet ministers and lawmakers watched from the stands.

"As president and as father of this country, I am greatly saddened that our policemen had to lay down their lives for this mission. Without question, these people are heroes," Aquino told the nation on television late Wednesday.

The president was absent from Thursday's ceremony, attending another public event. His spokeswoman Abigail Valte denied suggestions the president snubbed the dead, telling reporters he was to attend memorial services at a Manila police camp on Friday.

Two of the slain officers have already been buried by their Muslim kin.

'We cannot live this perpetual terror'

Almost 400 police commandos had swooped before dawn in the operation to hunt down Zulkifli bin Hir alias Marwan, a top suspect in the 2002 Bali bombings and one of the United States' most wanted militants, with a $5 million bounty for his capture.

But after killing a person they thought to be Zulkifli, the commandos came under devastating ambushes by at least two large guerrilla groups.

Aquino said most of the casualties were sustained after they ran into the Moro Islamic Liberation Front (MILF), which signed a peace treaty with Manila last year, and the Bangsamoro Islamic Freedom Fighters, who are allied to Islamic State fighters in Iraq and Syria.

Police say Zulkifli was killed in the operation, although there has been no independent confirmation of his death. Police said a second target, Filipino militant Abdul Basit Usman, escaped.

The MILF and civilians living amongst them suffered 16 dead or wounded in the fighting, said Teresita Deles, Aquino's adviser on the peace talks.

The MILF maintains that it acted in self-defence and has vowed to pursue the peace process.

To cement the peace, Aquino has urged wavering legislators to pass a proposed law granting regional self-rule to Muslim regions in time for the end of his six-year rule in mid-2016.

But senators have warned the law is now unlikely to be passed by March as planned.

Deles told ABS-CBN television Thursday that the proposed law may face delays as "harder questions will be asked" in parliament, but said it was crucial for the legislation to go through.

"If you stop it now, I am sure a few years later we will say, 'We cannot live this perpetual terror... our children can't go to school, no hospitals can be put up there'," she added.

Despite the bloodbath, she said the peace process was also continuing on other fronts, with Philippine government negotiators and MILF counterparts meeting in Malaysia on Friday to discuss the start of decommissioning of rebel weapons and forces.