Marines Operations Officer Rowan Rimas says the discovery is a sign that the Daesh fighters are running away. Authorities are investigating where the money came from.
Philippines troops found bundles of banknotes and cheques worth about $1.6 million abandoned by Daesh-linked militants holed up in Marawi City, a discovery the military said on Tuesday was evidence that the fighters were pulling back.
Fighters linked to Daesh have been cornered in a built-up sliver of the southern lakeside town after two weeks of intense combat. Fighting erupted in Marawi after a bungled raid aimed at capturing Isnilon Hapilon, whom Daesh proclaimed as its "emir" of Southeast Asia last year after he pledged allegiance to the group.
The military said that over the past 24 hours it had taken several buildings that had been defended by snipers.
In one house they found a vault loaded with neat stacks of money worth 52.2 million pesos ($1.06 million) and cheques made out for cash worth 27 million pesos ($550,000).
"The recovery of millions in cash indicates that they are running because the government troops are pressing in and focusing on destroying them," Marines Operations Officer Rowan Rimas said at a news conference in Marawi as helicopters on machine-gun runs buzzed overhead.
TRT World's Shamim Chowdhury reports from Marawi.
Duterte, who launched a ruthless "war on drugs" after coming to power a year ago, has said the Marawi fighters were financed by drug lords in Mindanao but according to military spokesman Jo-Ar Herrera, the stash of banknotes and cheques was evidence that the militants had links to international terrorist groups. However, he said an investigation was needed to establish the facts.
It is possible that the money came from a bank that was raided on the first day of the siege. Herrera told Reuters last week that a branch of Landbank had been attacked and he had heard that one of its vaults was opened.
The battle for Marawi has raised concerns that Daesh is building a regional base on the Philippine island of Mindanao.
Officials said that, among the several hundred militants who seized the town on May 23, there were about 40 foreigners from neighbouring Indonesia and Malaysia but also from India, Saudi Arabia, Morocco and Chechnya.
Stockpiles of food and weapons
The fighters prepared for a long siege, stockpiling arms and food in tunnels, basements, mosques and madrasas, or Islamic seminaries, military officials say. The Philippines is largely Christian, but Marawi City is overwhelmingly Muslim.
Progress in the military campaign has been slow because hundreds of civilians are still trapped or being held hostage, officials have said.
"In a few days, we will be able to get everything, we will be able to clear the entire Marawi City," armed forces Chief of Staff General Eduaro Ano said in a radio interview.
On Monday, President Rodrigo Duterte offered a bounty of 10 million pesos ($200,000) to anyone who "neutralised" Hapilon, and 5 million pesos for each of the two leaders of the Maute group, one of four factions that banded together to take the town.
Ano said an estimated 100 Maute militants were holding out, and the military was checking on a report that one of its founding leaders, Omar Maute, had been killed in an air strike.
Civilians still trapped
A four-hour ceasefire to evacuate residents trapped in the town was interrupted by gunfire on Sunday, leaving some 500-600 inside with dwindling supplies of food and water.
Officials say that 1,469 civilians have been rescued.
The latest numbers for militants killed in the battle is 120, along with 39 security personnel. The authorities have put the civilian death toll at between 20 and 38.
Asked to describe the fighting skills and training of the militants in the town, Major Rimas said: "They have snipers and their positions are well defended. Maybe they watch war movies a lot, or action pictures a lot so they borrowed some tactics from it."