Manilla: A 6.8-magnitude earthquake struck off the coast of the central Philippines on Monday, killing at least seven people and causing widespread panic in cities where buildings shook violently.

The powerful quake hit in a narrow strait between the heavily populated island provinces of Negros and Cebu, leaving fissures on roads, damaging bridges, and shutting down the power supply, officials said.

In Cebu city, a popular tourist destination, hotel guests scrambled to higher floors as unfounded rumours of a huge tsunami heading to the metropolis of 2.3 million spread on mobile phone text messages.

Among the casualties were two elementary school children who were crushed to death by collapsed walls.

"They are all victims of collapsed walls and fences," Civil Defence Chief Benito Ramos said of the seven killed.     A three-storey building in Negros also collapsed, while huge cracks appeared on highways and at least seven bridges, rendering them impassable, local authorities said.

Ramos said the violent shaking of buildings in Cebu city -- 50 kilometres from the epicentre -- led to broken windows and cracks on some walls, but no high rises were believed to have sustained major damage.

Local residents said there was panic in the country's second-biggest city, but there were no immediate reports of casualties or major damage there.

"There is news going around of tsunami waves, so we are doing our best to keep everybody calm," Barbi Patino, a spokesman for the 17-story Parklane International Hotel in Cebu said.

"We are completely safe inside the hotel, but we could see people on the streets now rushing away from the area."