Two people were killed and more than a dozen others wounded when a bomb exploded near the entrance to a shopping centre in the southern Philippines.

Police said they believed the New Year's Eve blast was orchestrated remotely by suspected Muslim militants.

The target appeared to be the entrance of the South Seas Mall in Cotabato City, Major General Cirilito Sobejana said.

Children were reportedly among the injured.

A second unexploded bomb was recovered nearby, police said.

Maj-Gen Sobejana said an initial investigation showed the design of the bomb was similar to those used in the past by local Islamist militants who have pledged allegiance to Isis.

Government forces launched an offensive against militants belonging to a group called Daulah Islamiyah last week and at least seven died in the fighting, Mr Sobejana said.

"This is a part of the retaliation, but the problem is they're victimising innocent civilians," he told reporters.

Superintendent Romeo Galgo Jr, the deputy police director of Cotabato, said witnesses saw a man leave a box in a crowded area near the entrance where vendors and shoppers were.

The explosion shattered glass panels and scattered debris onto the street.

Two of the roughly 30 people hit by the blast died while being brought to a hospital, Mr Sobejana said.

Cynthia Guiani-Sayadi, Cotabato's mayor, condemned the bombing and called on residents to help fight terrorism.

"This is not just another terroristic act but an act against humanity. I cannot fathom how such evil exists in this time of merry making," she told reporters. "It is unimaginable how some people can start the new year with an act of cruelty but no matter how you threaten us, the people of Cotabato are resilient. We will stand up against terrorism."

The bombing was just the latest in a number of attacks blamed on militants in the volatile region. Hundreds of militants aligned with Isis sparked a five-month battle in the city of Marawi last year.

Fighting and airstrikes have left more than 1,100 mostly militants dead and displaced hundreds of thousands of villagers.

President Rodrigo Duterte placed the southern third of the country under martial law to deal with the Marawi siege, the worst security crisis he has faced since taking office in mid-2016.