A homemade explosive device blasted through a bus terminal in a southern Philippines city on Friday, killing three children and injuring at least 35 people, according to a police report.

According to city police chief Senior Superintendent Paniares Adap, the explosion occurred at a bus terminal in Cotabato City, some 960 km south of Manila, just before noon. An unidentified man left a bag containing the bomb in the bus terminal for Weena Bus Lines on Magallanes Street when it exploded.

The bus terminal manager was among those injured.

Adap said investigators have yet to determine a motive for the attack, which occurred amid the counting of votes for mid-term elections that were held on Monday. Police have no suspects to pursue in the investigation.

"We're still trying to establish the motive for the blast, but we can't discount the possibility of a terrorist attack," Adap told reporters.

Jomar Yap, Central Mindanao police spokesperson said: "Witnesses heard a loud explosion from one of the stores. The victims, most of them passengers and pedestrians, were rush to hospitals. Troops are now in the area. The entire city was placed on high alert."

Senior Inspector Wally Casuyo of the Cotabato City police said extortion was the likely motive for the bombing. The bus company has been targeted by armed groups demanding money in the past.

President Gloria Macapagal Arroyo condemned the bombing. "We condemn in the strongest terms this attack on innocent civilians," Arroyo's spokesman Ignacio Bunye said. "The president has ordered a full investigation."