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(Image: GMA / CNN)

The blast struck outside a high-end hotel at a busy market in Davao City on the southern Philippine island of Mindanao at around 10.15pm local time on Friday.

It left at least 12 dead, according to a Philiippine presidential spokesman.

Witnesses heard a terrifying bang and smoke was seen billowing across the city.

(Image: TWITTER)

(Image: TWITTER)

Buildings near the market, including a university, were lockdown for hours.

"We were having a meeting and we heard a very huge explosion. The first thing we thought was 'it's a bomb'," witness John Rhyl Sialmo III said.

The 20-year-old student added: "The area where there was the explosion was a massage parlour. So we saw these men and women from that place in their uniform, they went to the school lobby to seek help. They were soaked in blood."

The explosion comes after the national police force thwarted an assassination plot against President Rodrigo Duterte, who usually flies home to Davao City every weekend.

Facebook launched a safety check feature for those in the horror.