"Most of the victims were still asleep when they were strafed and then their houses were torched," said regional health chief Kadil Jojo Sinolinding.
Seventeen people were hurt in the attack, including nine critical cases. Four children are among the worst hit.
"There were initial reports that it was in retaliation for local officials stopping the rebel group from recruiting more members in the province," correspondent Girlie Minao reported from Manila.
Earlier, government security forces had rescued two Chinese men from a nearby town. They had been kidnapped by Abu Sayyaf rebels more than three months ago.