Nearly 2,000 people were evacuated and hundreds more were stranded on rooftops.
Philippines President Gloria Arroyo appealed for donations and called for calm.
"I am calling on our countrymen, especially residents of metro Manila and other provinces in the path of the typhoon, to please stay calm, follow the instructions of local officials and civil defence authorities," she said in a TV message.
Mayor Mon Ilagan of the town of Cainta, in Rizal province to the north, told local media his town was "almost 100% under water".
Rizal Governor Casimiro Ynares was quoted by local TV as saying other towns were completely inundated.
Provincial spokesman Tony Mateo, quoted by the Associated Press, said at least 35 people had been killed in five townships in the province and 27 more were missing.
Deputy presidential spokesman Anthony Golez told AP that two people had died south of Manila, and three others in Quezon City. There are media reports of at least 10 more deaths in and around the capital.
Roads leading into Manila were rendered impassable by stalled vehicles, and some ferry services were cancelled.
Thousands of passengers were stranded as international and domestic airports were shut down.
Tropical Storm Ketsana, with winds of up to 100 km/h, is still over Luzon, and is expected to head out over the South China Sea on Sunday or Monday.
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