Eleven people including many high school students have been killed after a bomb exploded aboard a bus in the southern Philippines, the military says.

The bus operated by the Rural Transit company was travelling through the town of Maramag in the strife-torn island of Mindanao when the bomb went off, said regional spokesman Major Christian Uy.

The blast also injured 21 people, he said on Tuesday.

Many of the victims were high school students who had just boarded the bus as it passed a school in the town, said Lieutenant Norman Tagros, spokesman for a local infantry brigade.

The bomb went off almost immediately after the students got on.

Tagros said extortion was being eyed as the likely motive. The bombing was the latest in a series of attacks on the bus company.

Last month a bomb exploded aboard a Rural Transit bus in Mindanao, leaving four people injured.

Ten people were killed when a bomb exploded aboard a bus operated by the same company on Mindanao in 2010, which was blamed on an extortion scheme linked to Muslim extremists.

Armed groups have proliferated in the southern Philippines since Muslim guerrillas began fighting in the 1970s to set up an Islamic state in that part of the largely Christian Philippines.

Among them is the Abu Sayyaf, an Al-Qaeda-linked group notorious for bombings and mass kidnappings, as well as other groups opposed to peace efforts in the south.

The main Islamic rebel group, the Moro Islamic Liberation Front, signed a peace agreement with the government in March.