Dozens were wounded in the blast
at a market in the southern city of Davao.
Mr Duterte - who was in Davao at
the time of the blast but was not near the market - has declared a "state
of lawlessness" following the explosion.
This allows troops to be based in
cities to assist the police.
National Defence Secretary Delfin
Lorenzana said that Abu Sayyaf wanted to retaliate after suffering heavy
casualties on its stronghold of Jolo island about 900km from Davao.
"We have predicted this -
and warned our troops accordingly - but the enemy is adept at using the
democratic space granted by our constitution to move around freely and
unimpeded to sow terror," Mr Lorenzana said in a statement.
A
presidential spokesman said investigators had found shrapnel from a
mortar-based improvised explosive device (IED) at the scene.
Police in the capital
Manila are on high alert following the deadly blast.
At least 60 people
were injured and 30 were taken to hospital.
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Philippines
war on drugs
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Rodrigo
Duterte sworn in as Philippines president
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Who are the
Abu Sayyaf group?
The explosion took
place outside the Marco Polo hotel in an area frequently visited by Mr Duterte.
Broken glass and
plastic chairs were scattered at the scene, which has since been cordoned off
by police bomb experts and investigators.
"The force just
hurled me. I practically flew in the air," witness Adrian Abilanosa told
the AFP news agency as bodies lay strewn amid the debris.
The president said the
Philippines was going through "extraordinary times" which was why he
had decided to allow the security forces to conduct searches previously done
solely by the police.
A spokesman for the militant group Abu Sayyaf claimed
responsibility soon after the attack, but the authorities initially said they
were considering the possibility that drug syndicates were behind it.
The region has been
under a heightened security alert in recent weeks because of a military
offensive against Abu Sayyaf.
Regional police chief
Manuel Guerlan said a ring of checkpoints had been placed around the city's
exit points.
"A thorough
investigation is being conducted to determine the cause of the explosion,"
he said. "We call on all the people to be vigilant at all times."
On Monday at least 12
soldiers were killed in clashes with militants in what was the deadliest day
for Philippine troops since President Duterte was elected in May.
His election has
prompted a spike in drug-related killings, with more than 2,000 deaths since he
took office on 30 June, nearly half of them in police operations.
Davao is the biggest
city in the southern Philippines and has a population of about two million
people. It is about 1,500km (932 miles) from the capital Manila.
The city is part of
the southern region of Mindanao, where Islamic militants have for decades
fought a separatist insurgency that has claimed more than 120,000 lives.
Mr Duterte was mayor
of Davao for much of the last 20 years before winning elections in a landslide
this year and being sworn in as president on 30 June.
He has been credited
for bringing a degree of peace and order to Davao through his tough security
policies, while simultaneously brokering deals with local Muslim and communist
rebels.
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