Stray bullets and exploding firecrackers have killed two people and injured hundreds in the Philippines, authorities say, amid the country's traditional riotous new year celebrations.

Key points: Two killed during chaotic New Year's Eve celebrations in the Philippines

Two killed during chaotic New Year's Eve celebrations in the Philippines Drunk man died after hugging giant firecracker as it was about to explode

Drunk man died after hugging giant firecracker as it was about to explode Thousands left homeless after stray firework starts blaze in shanty town

A drunk man died after he embraced a giant firecracker called Goodbye Philippines as it was about to explode, health secretary Janet Garin told reporters.

"His jaw was shattered. He was so intoxicated he hugged the Goodbye Philippines," Ms Garin said, adding the man was pronounced dead at the hospital.

Eighty percent of the country's 100 million people are Catholic but Filipino superstition dictates making ear-shattering noises during New Year's Eve to ward off bad luck.

Revellers set off firecrackers and shoot guns into the air to celebrate the December festive season.

The health department listed 380 injuries due to fireworks and four others due to stray bullets.

In many hospitals across the country, firecracker victims rushed into emergency rooms grimacing in pain as they held their bloodied limbs.

An eight-year-old boy in the northern farming province of Nueva Vizcaya had three of his fingers amputated after a firecracker exploded in his hands, Ms Garin said.

At least nine children had their fingers amputated due to firecracker injuries, she said.

Thousands homeless after blaze in shanty town

Firefighters work to extinguish a huge fire that razed a slum area in Manila. ( AFP: Noel Celis )

In a Manila shantytown, a lit firecracker started a slum inferno, which quickly spread, fire bureau spokesman Renato Marcial said.

The blaze destroyed a cramped maze of wood and cardboard huts in the early hours of Friday, leaving 3,000 people homeless, city disaster officer Johnny Yu said.

Panicked and weeping residents fled their burning homes carrying clothes and furniture while men, many of whom were drunk from a night of merrymaking, desperately tried to put out the fire with buckets of water.

A 65-year-old woman died from a heart attack as she watched her house burn, Mr Yu said.

Many Filipino civilians keep licensed guns in their homes to protect themselves in a high-crime society and most firecrackers are legal and easily available.

The 384 injuries recorded so far for 2015 are up from 354 in 2014.

AFP