Twenty-one female employees were trapped in the fire, with one person still missing and three surviving by jumping from a second-storey window, the provincial fire department said.
Eleven bodies were recovered soon after the fire was put out, Chief Inspector Mario Palarca told AFP.
Investigators later found six other corpses, one of his aides said.
"Twenty-one people were asleep on the second floor when the fire struck the ground floor. They could not find the emergency exit because of the huge volume of black smoke," Palarca said by telephone.
Saleswoman Vicky Belez, one of the survivors, said she only survived because she was in the bathroom when the fire broke out.
"I was in the bathroom. Then I saw the huge flames outside so I ran out immediately. There was a lot of smoke and the flames were already huge," the 21-year-old said as doctors treated her burned arms.
Cashier Mylene Tolo, 22, said she narrowly made it out despite the blinding smoke and large flames, which left her with scorched arms.
"We were able to escape the fire because we were awakened by a loud explosion," she said.
The fire occurred in a three-storey department store in Butuan, a city of 300,000 people on the southern island of Mindanao.
It is common in the Philippines for people in low-paid jobs to sleep at their place of work.
The store's assistant supervisor, Berlita Ballestero, said there was only one emergency door linked to the employees' living quarters.
"They must have had trouble getting out because there is only one fire exit," she told AFP.
Loren Catedral, operations officer at the civil defence office in Butuan told AFP the blaze started on the ground floor of the building.
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