The military said Tuesday's bombing appeared to be the work of the Moro Islamic Liberation rebels, but a spokesman for the Muslim separatist group denied involvement in the attack.
The bomb went off near the home of Mayor Saudie Ampatuan in Datu Piang in Maguindanao province, said army spokesman Maj. Julieto Ando.
Ampatuan died of injuries to his head and chest. Among those killed were a town councilor, the treasurer and a bodyguard, Ando said. The others were not immediately identified, Ando said. He said the death toll rose after authorities counted all the dead from hospitals in different towns.
Ando said the military suspected the Moro Islamic Liberation Front, because "it is only the MILF that is capable of making powerful homemade bombs."
The military is holding a witness who claimed he saw a man known to be a follower of an MILF commander planting the bomb. The blast was probably caused by an 81mm mortar detonated by a remote control device, he said.
Moro rebel spokesman Eid Kabalu denied involvement, saying the mayor had many personal and political enemies.
"There is no reason for us to do that because the mayor is not our enemy," he said.
The military in the past has blamed the rebels for similar attacks in the area.
A battalion of about 500 soldiers was deployed to Datu Piang in response to the attack.
The rebels, who have signed a cease-fire with the government, have been fighting for Muslim self-rule in the southern Philippines for nearly three decades. The Philippines is mainly Christian.
Ando said Ampatuan is a "nemesis" of the rebels, who earlier this year attacked a convoy transporting the mayor and his father, Maguindanao Gov. Andal Ampatuan. The men survived the ambush, but two bodyguards died.
Formal peace talks between the government and the MILF are expected to resume next month in Malaysia. Both sides have accuse each other of violating a shaky 1997 truce.
Another Muslim militant group active in the southern Philippines and linked to several kidnappings of Western tourists and missionaries, the Abu Sayyaf group, was once allied with the MILF but split off several years ago.
The Philippines was one of several countries in Southeast Asia targeted by State Department warnings after the deadly terrorist bombing in Bali, Indonesia in October.
In a travel warning issued Nov. 3, the State Department urged caution by all American travelers.
"The terrorist threat to Americans in the Philippines remains high," the warning noted.
"Information available to the United States Government suggests terrorist groups may be planning bombing attacks in the Philippines from now through the New Year holiday period," it continued.
Abu Sayyaf was blamed for a series of deadly bombings in the Philippines in October that struck two department stores, killing seven people and injuring 152 others, and a blast at a Roman Catholic shrine, killing one and injuring 18.