Ali Ali allegedly bashed the 17-year-old bar worker to death before trying to flee, according to local police, who described the murder as "grisly".

Ali recently completed a 15-year prison sentence for the vicious assault of Michael Tully in the Melbourne Custody Centre in 1999.

Mr Tully was left with serious brain damage after Ali repeatedly stomped and jumped on his head in the crowded remand cell, surrounded by 10 other inmates.

Ali, 42, also has convictions for assault with a weapon, causing injury intentionally or recklessly, and drug, dishonesty and driving offences.

Ali was arrested in Dumaguete City on the southern Negros Island on Sunday, local media reported.

The teenager's body had been found in a room that Ali had occupied since January 28 in Antonio's Pension House, a hotel in Dipolog City, in the neighbouring island of Mindanao.

Superintendent James Goforth, a local police chief, was quoted as saying Ali had a bandaged arm when he was arrested, which had probably been injured when he hit his victim.

Superintendent Goforth said Ali had been seen on CCTV footage with the teenager, and could also be linked to her through Facebook and money transfer slips.

Ali told police the woman had bit his penis and he had punched her repeatedly until "her teeth came off".

He is reportedly also facing drugs charges, after allegedly being found in possession of marijuana.

Superintendent Goforth said no weapon had been found with the body, and an autopsy would determine the cause of death.

It is understood consular officials are providing assistance to Ali, who police said had initially refused to be interviewed.

Police started surveillance on Ali after locals reported seeing him with the teenager, and after noticing his bandaged arm. He had boarded a ferry from Dipolog to Dumaguete shortly after the death.

Photos of Ali provided by local police show him being fingerprinted, wearing a detainee T-shirt, and holding a wanted poster.

Police believe he had entered the country legally after consulting his passport.

When Ali was sentenced to 15 years jail in 2007 - after three trials - Michael Tully's brother Rodney wept outside the Supreme Court.

Ali had spat on Mr Tully and wrongly accused him of being a paedophile before he stomped on him until he lay bleeding on the cell floor. The court found Ali was not remorseful.

Mr Tully was left unable to walk or talk after the bashing. He had been moved to the 3.7 metre and 3.1 metre cell from a psychiatric hospital after being charged with an armed robbery that netted cigarettes and $20.

Rodney Tully said he was sickened that Ali had been released, as it was only a matter of time before he ruined another life.

"I knew he had been due to be released pretty soon, and it gave me a chill down my spine.

"Learning what I have today doesn't surprise me. He demonstrated what sort of a man he was by what he did to my brother.

"There was always going to be someone who crossed paths with him and triggered him to just go off again."

A former police officer who once charged Ali with a serious crime said it was inevitable he would offend again.

"It is a great shame that there is a 17-year-old girl deceased and someone who showed no remorse is arrested for another tragic crime."

Justice Elizabeth Curtain told Ali during sentencing "your assault was so extreme even experienced criminals were sickened by your conduct" and gave evidence to see justice done. One prisoner later saw Ali "crowing" as if "happy with his work", a witness said.

Justice Curtain said she did not regard Ali's prospects for rehabilitation "as at all likely".

In 2010, Ali sought leave to appeal his sentence. The Court of Appeal heard he had been raised in Marrickville in Sydney. He left school in year 10 for a job on the railways and then as an Australia Post mail officer. His family moved to Melbourne and Ali worked with his uncle managing a convenience store in North Melbourne.

His application to appeal was unsuccessful.

"The attack was unprovoked. The victim had a simple manner and appeared vulnerable. The applicant attacked him in order to punish him for a disposition imagined by the applicant," Justice Robert Buchanan wrote.

"The attack was extremely violent and sustained. The victim offered no resistance and suffered a severe brain injury, which effectively ruined his life. Clearly the offence itself called for condign punishment."

Justice Buchanan agreed with Justice Curtain that Ali's prospects of rehabilitation were slim.

"It was apparent from her sentencing remarks that [Justice Curtain] ... had regard to other circumstances than the plea in canvassing the question of rehabilitation, not least the applicant's extensive criminal record, his conduct in prison and the observations of the psychiatrist and the psychologist and the applicant's failure to take any meaningful steps to effect his rehabilitation save in the months before sentence.

"In my opinion the sentencing judge did not err in her estimate of the applicant's prospects of rehabilitation."

With Lindsay Murdoch