MANILA, Oct 10: At least a dozen people were killed and over 40 wounded when a homemade bomb exploded during a town festival in the southern Philippines, army and police officials said on Tuesday.

Federico Dulay, police chief of North Cotabato province, said a homemade bomb, fashioned from a mortar round, exploded at around 8pm (1200 GMT) near a packed gymnasium in Makilala town, which was celebrating its 52nd anniversary.

"We are still investigating the incident," Dulay told reporters. "We are not ruling out anything, including a terror attack."

The Philippines, a largely Catholic state, is fighting Muslim and communist insurgencies on its southern islands, home to some of the country's poorest communities and a significant Muslim minority.

A spokesman for the country's largest Muslim rebel group, the Moro Islamic Liberation Front denied any involvement in the attack. "Honestly, we have no role in these bombings," said Eid Kabalu.

Makilala is a Christian-dominated town with a small Muslim population. Communist group, the New People's Army, which has been waging a rebellion since 1969, is also active.—Reuters