Philippine police have rescued two hostages and arrested 10 members of a kidnap gang in a Manila suburb.

Operatives from the National Anti-Kidnapping Task Force raided the kidnappers' hideout in Las Pinas city, south of Manila, Sunday.

They rescued 26-year-old Jeffrey Cruz and his girlfriend 20-year-old Katrina Schoof, who were abducted four days ago near the upscale Ayala Alabang shopping district.

The kidnappers had demanded a ransom of nearly $550,000.

Last year, President Gloria Arroyo ordered a massive crackdown on kidnap gangs, leading to the arrests or killing of several gang leaders.

The government says a rash of kidnappings in Manila targeting businessmen has scared off potential investors.

Some information for this report provided by AP and AFP.