By Agence France-Presse
The firefight erupted as police were hunting down members of the Ansarul Khilafa Philippines (AKP) group on the restive southern island of Mindanao Saturday, local police spokesman Superintendent Romeo Galgo said.
"A foreign national initially identified as Abu Naila and one female member identified only as a certain Kadija... resisted arrest by attempting to lob a grenade against the arresting personnel," he said in a statement.
The police responded by opening fire, killing the two, he added.
Authorities did not disclose the nationality of Abu Naila although they have previously said the AKP has worked with foreign militants.
Extremists from other Southeast Asian nations have been known to come to the Philippines to train local fighters especially in the use of explosives.
The AKP is one of several violent Islamic militant groups on Mindanao, homeland of a large Filipino Muslim minority where a decades-old separatist rebellion has claimed more than 120,000 lives.
The government has been hunting down other members of the group after its founder and leader, Mohammad Jaafar Maguid, was tracked down and shot dead last week at a beach resort in Mindanao while three "cohorts" were arrested.
The group has been known to fly the black flag of the so called Islamic State and Maguid appeared in a video circulated on social media last year with the leaders of other local militant groups pledging allegiance to IS.
The authorities are looking into Ansarul Khilafa's role in a bombing in Davao, Mindanao's largest city in September last year that killed 15 people and injured dozens of others.