The gunman, reportedly sacked over robbery and drugs claims, is demanding his job back, local media says.
Children were reported to be among at least 20 passengers, all of them Asian, on the tourist bus in Manila.
Negotiations with the gunman are reportedly taking place.
Six hostages, three adults and three children, have now been freed, national police spokesman Senior Superintendent Agrimero Cruz told the AFP news agency.
There were initial reports that the tourists were from South Korea, but police now say they are mostly from Hong Kong.
The gunman has been identified as Rolando Mendoza, a former senior police inspector who was sacked in 2008 over allegations of robbery, extortion and drug-related crimes.
He reportedly hitched a ride on the bus before turning his gun on the passengers.
Hijackings are not uncommon in the Philippines. However, the targets are usually political or related to business conflicts.