The victims were sleeping in the padlocked building when the fire, believed to have been triggered by faulty electrical wiring, broke out before dawn, Chief Inspector Joel Tuttuh told AFP.
Vendors and their families regularly spend the night inside the decrepit market in the port city of Zamboanga to watch over their merchandise, mostly used clothes and vegetables, he said.
All but one of the buildings many entrance and exit doors are left open for the night, he said.
Two of the six children who perished were one year old, he said, adding 13 other people were being treated in hospital for severe burns.
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Huge and sometimes deadly fires at sprawling slums as well as markets and factories are common in the Philippines, where fire safety regulations are sometimes wilfully disregarded.
Last May, 72 people were killed after a huge blaze tore through a footwear factory in the northern suburbs of the capital, Manila.
In one of country's deadliest-ever fires, 162 people were killed and 94 others were injured at a Manila disco in 1996.