A powerful bomb packed with steel nails has exploded on a passenger bus in the Philippines today, killing at least six people and wounding 26 others in a possible attack by an extortion gang, police said.

The blast in Digos city in Davao del Sur province occurred inside a bus owned by a company that has been targeted by extortionists in the past, said Superintendent Francisco Villaroman, the regional police intelligence officer.

The bomb, which had been placed in an overhead bin, tore a hole in the roof of the bus and shattered its windows. Six people died, and the wounded included several children, he said.

“They placed the bomb overhead and packed it with nails obviously to cause more casualties,” said Supt Villaroman, speaking by telephone from the scene.

The roof of the terminal also was damaged. Andres Caro, the regional police chief, said that investigators were collecting debris and bomb fragments in an effort to reconstruct the device used in the attack.

Supt Villaroman said that a notorious extortion gang named Al Khobar had demanded 500,000 pesos (£5,000) plus a 50,000 peso (£500) monthly payment from the bus company in July.

When the management refused, the extortionists bombed a bus in Digos on July 23, killing one person and wounding 32 others, he said. The bombs used in the earlier attack were packed with a similar type of steel nails.

Al Khobar has also targeted other bus companies and has been blamed for several bombings in the country’s southern Mindanao region. Officials say the group has links to Muslim militants, who are active in the area.

Government troops are fighting Moro Islamic Liberation Front rebels on the opposite side of Mindanao. Government forces launched air and ground assaults last month against three rebel commanders whose forces are blamed for killing dozens of civilians and pillaging southern villages on August 18.

The fighting has killed at least 49 civilians and displaced more than 300,000 people in five provinces in Mindanao, the government said. At least 17 soldiers and pro-government militiamen and more than 100 guerrillas have been killed, according to the military.

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