Troops and police closed off the area along Sinsuat Avenue in Cotabato city as firefighters and ambulances arrived at the scene, where witnesses saw at least four people lay bloodied on the pavement as cars and buildings burned after the explosion, officials said.
Cotabato city, a bustling regional trading hub, has been targeted by Muslim insurgents in the past.
Philippine authorities did not immediately point to any suspects, but government forces have been on alert in the southern region due to recent attacks and bombings by a breakaway Muslim rebel faction opposed to peace talks between a main insurgent group and the government.