Acting Prime Minister Julie Bishop has sounded the alarm that Islamic State is attempting to set up a base in the Philippines, on the doorstep of Australia and mainland Asia.

As foreign fighters continue to spread to all corners of the globe following the crumble of their caliphate in Syria, a number of hotspots are emerging including the southern Philippines, where Marawi has been ravaged by war.

"Evidence has indicated radicalised fighters in the southern Philippines have been inspired by ISIL," Ms Bishop said.

"Terrorists fighting in Marawi during the past five months have been shown waving ISIL banners and declaring allegiance to ISIL.

Terrorists fighting in Marawi during the past five months have been shown waving ISIL banners and declaring allegiance to ISIL

"One of the insurgent leaders, Hapilon Isnilon who was recently killed in Marawi, was a self-styled Emir of a hoped-for ISIL caliphate in Mindanao."

While Marawi has all but been reclaimed by government forces, other regions of the island nation are now bracing for battle.

"I don’t like to fight. But this is our land and we will not let them take this like they destroyed Marawi," a veteran Christian militia fighter who goes by the nom de guerre Commander Ilangilang, told the New York Times this month.

She says it is only a matter of time before Islamic State’s black flag is raised in the mountainous periphery on the outskirts of Kauran, the farming community where she grew up and where she talked to Times journalists, about 90 miles south of Marawi.

Her comrade, Commander Asiong added: “They may be close to being defeated in Marawi, but they can spread out."

"They can regroup, join other I.S. allied groups here… While we have guns, our community is no match for them. So we pray that the government finishes them in Marawi. If not, there is nothing we can do except to protect ourselves and fight to the death. We will defend our land until troops arrive."

We pray that the government finishes them in Marawi. If not, there is nothing we can do except to protect ourselves and fight to the death

This follows reports in May, that 40 jihadi fighters have returned to Australia in the past five years, with the large majority walking free because of a lack of evidence.

Ms Bishop has again flagged concerns about the threat of returning foreign fighters, telling the Daily Telegraph: "Around 40 people have returned to Australia after travelling to Syria and Iraq and joining groups involved in the conflict and some of these returnees remain a significant security concern."

"The government is concerned that foreign fighters who have gained fighting experience in the Middle East will return to pass this knowledge on to violent extremists in our region," she added.

Earlier today in New York, a suspected terrorist allegedly yelled "Allahu Akbar" (Allah is the greatest) after driving a van into a group of pedestrians and killing up to seven people.

It prompted President Donald Trump to tweet — "We must not allow ISIS to return, or enter, our country after defeating them in the Middle East and elsewhere. Enough!"