Regional military spokesmen told reporters 97 bodies were recovered in Cagayan de Oro, a major port on Mindanao island, and 75 were found in Iligan, a nearby southern port, accounting for most of the deaths.
They said 375 people were still missing from the two cities alone.
Iligan mayor Lawrence Cruz described rampaging floodwaters from swollen rivers that swamped at least 10 villages on the city's outskirts.
"It happened so fast, at a time when people were fast asleep," Cruz told GMA television.
The station showed dramatic pictures of a family escaping out of the window of their home as floodwaters rose, and rescue workers in orange vests shepherding survivors to safety above chest-deep floodwaters.
The Philippine army mobilised 20,000 soldiers to help in rescue and evacuation efforts on Mindanao, which bore the brunt of the cyclone, Ramos told AFP.
"The storm was moving slowly so it dumped a lot of rain over the area. The flooding is extensive," said Ramos, executive director of the National Disaster Risk Reduction and Management Council.
Iligan tourism officer Pat Noel told AFP waters began rising shortly before midnight (1600 GMT Friday) as people slept, sweeping houses made of light materials and their inhabitants along the riverbanks.
"Many of them told me they sought refuge on their rooftops," he said after joining the first wave of rescuers at daybreak.
"By the time I arrived they were sweeping thick mud out of their homes and the water on the street was down to knee level," Noel said, adding that two of three rivers that flow into the port of Iligan had overflowed.
A popular radio commentator was among those killed, he added.
Ramos said 25 millimetres (one inch) of rain had fallen over the past 24 hours.
"Storms rarely hit this area and people probably became complacent even though they knew it was heading their way," he said.
Weather forecasters said the eye of the storm passed close to Dipolog city near Iligan early Saturday and Washi was now heading out to the Sulu Sea.