But Defence Minister Orlando Mercado said that four of the hostages were killed during the operation to free them.
Thirteen children and two adults were successfully rescued, but five of them - including three children - were wounded, he said.
A second group of hostages - some of whom are foreign - held by Abu Sayyaf on Jolo island have been moved to an unknown location.
Mr Mercado said reports that two of the foreign hostages on Jolo had been killed were unconfirmed and not true.
Abu Sayyaf seized 27 hostages, 22 of them children, on Basilan on 20 March.
The Philippines army responded by launching an assault on their mountain base.
But when the base was captured after a week of fierce fighting, it was found to be empty and the rebels had moved to a new location.
Mr Mercado said he hoped more hostages would be freed soon, and military officials spoke of continued fighting near Isabela, the capital of Basilan.
Direct contact
An Abu Sayyaf representative has meanwhile made direct contact with the Philippines Government for the first time since the start of the hostage crisis on Jolo.
Government press secretary Ronaldo Puno said Vice-President Gloria Arroyo spoke to Abu Sabaya, an Abu Sayyaf spokesman, in a conversation authorised by President Joseph Estrada.
Mr Puno added that there had been no negotiations but that Abu Sayyaf had given a statement, which was passed on to the president.
He gave no details of the statement.
The 21 hostages on Jolo have been moved to a new location.
However, Defence Secretary Orlando Mercado insisted that the group were still within a military cordon set up around their jungle base.
There were reports that two of the hostages had died during an exchange of fire between the rebels and the Philippines army.
But Nur Misuari, a former Muslim rebel who is acting as negotiator between the kidnappers and the authorities, said that the two were merely wounded.
A rebel spokesman earlier told a local radio station that one hostage had died after being shot and another had suffered a heart attack.
When troops seized the bamboo hut where the hostages had been held, no bloodstains were evident inside.
Medicine delivered to the hostages on Monday had been left behind.
Bombs
Abu Sayyaf is the smaller of two groups fighting for a separate Islamic state in the impoverished Mindanao region of the southern Philippines, where most of the five million Muslims in this overwhelmingly Catholic country live.
On Wednesday, four bombs exploded in the centre the predominantly Christian town of General Santos, killing at least four people.
The explosions came after another Muslim rebel group, the Moro Islamic Liberation Front (MILF), ordered an all-out counter-attack against government troops, shortly after pulling out of peace talks.
Earlier, MILF guerrillas launched a grenade attack on the airport at Cotabato about 200km (125 miles) to the north-west of General Santos, taking about 100 people hostage.