MANILA, December 24, 2009 (AFP) - Twenty-seven people were missing Thursday after two boats collided in darkness in Manila Bay during the busy Christmas rush, the latest disaster to hit the Philippines in a year beset by tragedy.

Rescuers were searching for 26 passengers and one crew member who were aboard the wooden-hulled Catalyn B when it rammed into a fishing boat and sank in the early hours, coastguard officials said.

An emergency operation in the busy waterway swung into action, saving 46 people. However, the coastguard said the 27 people remained missing out of the 73 who were known to be aboard.

"Catalyn B smashed into the side of the fishing vessel," said the regional coastguard chief, Commodore Luis Tuazon.

"This is a small vessel with a single wooden hull. Water rushed in and the vessel sank not long after the collision," he said over local radio.

"It is clear there was a problem in observing the rules," he added, saying that one or other of the vessels must have failed to take evasive action to avoid a collision.

Tuason said a marine inquiry would establish which of the two crews was at fault.

The other vessel -- a 369-tonne fishing boat named Nathalia -- was damaged but was afloat, coastguard spokesman Armando Balilo told local radio.

"Some of those rescued are now aboard the Nathalia," Commander Balilo said.

The collision occurred at 2:25 am (1825 GMT Wednesday) as the passenger vessel was making its way to Lubang island southeast of Manila.

The other boat was on its way back to the port of Navotas in northern Manila after an extended fishing trip in the Turtle islands in the southern Philippines, Commodore Tuazon said. It sustained no casualties.

A coastguard statement said an air and naval search was continuing, with other private ships diverting from their course to join the rescue.

"It's possible some of them could have been trapped inside (the Catalyn B)," spokesman Balilo said. The submerged wreckage will be checked once divers reach the scene, he said.

Ferries form the backbone of mass transport in the archipelago nation of 92 million people.

Officials say bad weather, poor maintenance, overcrowding of vessels and lax enforcement of regulations have contributed to disasters, and water voyages in the busy Christmas period are particularly fraught with danger.

The world's deadliest peacetime maritime disaster occurred south of Manila in 1987 when a ferry laden with Christmas holidaymakers collided with a small oil tanker, killing more than 4,000 people.

In June 2008 another ferry tipped over during a typhoon off the central island of Sibuyan, leaving almost 800 dead.

A series of tragedies have struck the Philippines over recent months.

In September, the first of two powerful tropical storms battered the nation, claiming more than 1,000 lives and wreaking devastation across large swathes of the country.

In November, 57 people were slain in an election-linked massacre in a lawless region in the country's south.

And more than 47,000 people are facing Christmas in evacuation camps and temporary accommodation around Mount Mayon, south of Manila, as the rumbling volcano threatens a violent eruption.