By late Saturday, 14 were confirmed dead, the coast guard said, and more than 120 people were feared missing.
The Princess of the Orient sank near Fortune island off Batangas province, said Navy spokesman Lt. Cmdr. Salvador Cuba.
Passengers and crew among the 294 people rescued Saturday said the ship sank in less than an hour, highly unusual for a vessel with no apparent damage.
An officer of the Sulpicio Lines, which owns the ship, told navy authorities the Princess of the Orient left Manila around 8 p.m. local time Friday for Cebu City in the Central Philippines, Cuba said.
A few hours later the ship reported it was listing near Fortune island, about 75 miles south of Manila, and lost radio contact with its office in Manila around 12:30 a.m. Saturday. No other details were immediately available from the shipping company, Cuba said.
One crew member, Vincente Go, said the ship began leaning to the left and would not stabilize even after the crew began pumping ballast water, which is used to balance ships.
Normally, large ships pushed one direction by heavy winds or waves naturally bob back, but Go said the Princess of the Orient refused to do so.
Another crew member said the ship's cargo may have suddenly shifted to one side in the heavy seas.
But maritime officials said some other, still undetermined, factor must have been involved.
Tropical Storm Vicki was beating the northern Philippines with 75 kph (45 mph) winds when the ship left Manila at about 8 p.m. (1200 GMT) Friday for Cebu, about a day's journey to the south.
A storm warning prohibited ships of less than 500 tons from sailing but did not apply to the 13,734-ton ferry, coast guard spokesman Joel Garcia said.
A few hours later the ship reported it was listing 25 degrees near Fortune island off Batangas province, about 60 kilometers (40 miles) south of Manila, and then lost radio contact, the company told naval authorities.
Rescue efforts were delayed for several hours because the storm prevented rescue ships from leaving their berths, officials said.
The company said 338 passengers and 92 crew were aboard the ship. No foreign names were on the ship's manifest, Garcia said.
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