A police vice squad detained the 25 and seized evidence, including gambling materials and cash, in Thursday's raid on the home of Pacquiao's elder sister, Isidra Paglinawan, said local police chief inspector Leo Sua.
Pacquiao, the seven-time world champion elected to a seat in the Philippine parliament this year, personally watched as police searched the house in the southern port city of General Santos, but vowed not to interfere.
A lower court in General Santos ordered the raid as part of a crackdown on an illegal numbers game known as "masiao", but Paglinawan, 34, was not at home, Sua told reporters.
He said the detained people were bet collectors for the illegal racket, in which bettors place wagers on the last two digits of the winning ticket of the Philippine lottery.
Police seized 33,000 pesos (about 721 dollars) in suspected bets, said Sua, who led the raid. He said police would ask state prosecutors to file illegal gambling charges in court against Paglinawan and the 25 other suspects.
Sua said police were searching for Paglinawan.
Pacquiao told reporters Friday he was attending his father's birthday party when police raided Paglinawan's house next door.
He said he would ask the police to investigate whether his sister was indeed a "masiao" operator.
"I will not interfere. Let the law take its course," boxing's "pound-for-pound" king said.
Betting in an illegal numbers game or allowing one's property to be used for such a game is punishable by up to six years in prison.
Working for an illegal gambling operation, or actually running it, carries jail terms of between eight and 20 years.
The well-appointed houses of Pacquiao's parents and five siblings are tourist attractions in the otherwise depressed General Santos district of San Isidro, where Pacquiao grew up in poverty.
The sister sought by police and her husband have no known permanent jobs.
However it is well known in the neighbourhood that Pacquiao, now one of the world's richest sportsmen, gave his relatives the houses and large amounts of seed money to start their own businesses.
His winnings from boxing as well as his commercial endorsements last year made Pacquiao the world's sixth-highest paid athlete, with earnings of 40 million dollars, according to Forbes magazine.
During the election campaign in May, aides of Pacquiao's rival for the local parliamentary seat alleged that the boxer's family were "masiao" operators.
Pacquiao publicly denied the allegations during the campaign.
Pacquiao is expected to fight Mexico's Antonio Margarito for the vacant World Boxing Council junior middleweight championship on November 13.
He had wanted to fight undefeated American Floyd Mayweather Junior in what would have been boxing's richest ever draw, but protracted negotiations appeared to have fallen through.