The ferry was heading for the central islands of Camotes, in Cebu province, to the south-west of Leyte. The cause of the sinking is not yet known.
Divers will search waters on Friday for 15 people still missing.
Search and rescue operations continued through the night, with coast guard personnel reinforced by a Philippine navy ship and two air force planes.
Cause of the disaster is yet to be known.
According to initial reports, human error is suspected to be cause of the disaster.
Scores, sometimes hundreds, of people die each year from ferry accidents in the Philippines as many people rely on ferry services to get around its thousands of islands.
Philippines an archipelago of 7,100 islands known for poor record for maritime safety.