A crude bomb, blamed by security forces on a small pro-Islamic State militant group, killed two people and wounded dozens on Monday in the southern Philippines, an army commander said.

Islamist militants operate in the south of the largely Christian Asian country and some are known to have links with groups abroad, including al Qaeda and Islamic State.

Major General Cirilito Sobejana, an army division commander, told Reuters the bomb bore a "Daesh-inspired signature", referring to Islamic State by another name.

The bomb went off at the entrance to a shopping mall in the city of Cotabato in the early afternoon. As well as the two people killed, 28 were wounded, he said.

A second bomb was recovered in the same area, he said.

Sobejana said he suspected the blast was retaliation for the killing by government troops of seven members of a small militant group that has pledged allegiance to Islamic State.