MANILA, Philippines -- The Red Cross appealed Monday for funding to help more than 500,000 people who fled their homes after fighting between Muslim separatists and government forces erupted in the southern Philippines.

Clashes between government troops and the Moro Islamic Liberation Front (MILF) have reached its worst point in five years, according to the International Committee of the Red Cross.

Fighting broke out in Mindanao island on August 10 after the Supreme Court blocked a draft peace agreement intended to create a political settlement to four decades of sectarian bloodshed.

The Red Cross will issue an appeal for more funds to provide relief aid for up to 80,000 people a month since the agency's yearly budget of seven million dollars for the nation has nearly been exhausted due to the conflict.

"This budget extension appeal is mainly to cover the cost of relief items that we are going to distribute" and to send additional personnel to the area, said Red Cross deputy director for international operations, Dominik Stillhart.

The Red Cross has also asked the government and MILF to allow it access to displaced civilians, many of them sheltering in evacuation camps.

The conflict has "generated very serious humanitarian consequences," with many people needing help since they fled their homes with nothing, Stillhart told the Foreign Correspondents Association of the Philippines.

"We kind of have the impression that we need to be prepared for more hardship, more suffering," he said.

The Red Cross was particularly concerned about attacks on civilians and volunteers on the ground were trying to document these incidents, he said.

Manila has effectively suspended the peace talks with MILF and offered a P25 million bounty for three senior rebel leaders accused of leading the raids.