The quake on Friday, in waters off the town of Manay in the province of Davao Oriental, triggered a tsunami alert for coasts within 300km of the epicentre, but the warnings for the Philippines and Indonesia were subsequently lifted.
There were initial reports of damage to homes, buildings and bridges, one official in Manay said, although the full extent of the damage in the Philippines was not immediately clear.
At least two people were killed, civil defence official Karlo Puerto said by telephone, both in Mati City close to where the quake struck.
There were no other reports of casualties from regional disaster offices contacted by Reuters.
The quake was among the strongest in recent years to hit the Philippines, which sits on the Pacific "Ring of Fire" and experiences more than 800 quakes each year.
It came two weeks after the Philippines experienced its deadliest earthquake in more than a decade with 74 people killed on the central island of Cebu following an offshore quake of magnitude 6.9.
A video posted on social media and verified by Reuters showed people in the city of Davao calmly holding on to parked vehicles that rocked from side to side as the ground shook, as metal gates rattled nearby.
President Ferdinand Marcos Jr said authorities were assessing the situation and search-and-rescue teams would fan out once it was safe.
"We are working round the clock to ensure that help reaches everyone who needs it," he said in a statement.
Seismology agency Phivolcs warned of aftershocks as large as magnitude 6.4 and urged people in affected areas to stay away from the shoreline.
People in coastal areas had earlier been told to move inland or seek higher ground.
Phivolcs revised down the magnitude to 7.4 from an initial figure of 7.6, and put the quake's depth at 23km.
The governor of Davao del Norte in the Philippines said people panicked when the earthquake struck.
"Some buildings were reported to have been damaged," Edwin Jubahib told broadcaster DZMM.
"It was very strong."
With AP
