At least 60 people more were wounded in the explosion at a packed market.
According to a presidential spokesman, investigators had found shrapnel from a mortar-based improvised explosive device (IED) at the scene.
Police in Manila are on high alert following the deadly blast.
The explosion took place outside the Marco Polo hotel in an area frequently visited by Rodrigo Duterte, who was in Davao at the time but was not hurt.
Footages released show broken glass and plastic chairs scattered at the scene, which has since been cordoned off by police bomb experts and investigators.
Davao Vice Mayor Paolo Duterte, the president’s eldest son, issued a statement on Facebook in which he said it was too soon to determine who was behind the attack, but insisted that “authorities are on top of this incident”.
Regional police Chief Manuel Guerlan said a ring of checkpoints had been placed around the city’s exit points.
The region has been under a heightened security alert in recent weeks because of a military offensive against Abu Sayyaf, a jihadist group.
On August 29, at least 12 soldiers from the Philippines were killed during heavy fighting with militants in what was the deadliest day for Philippine troops since President Rodrigo Duterte was elected in May.
Rodrigo Duterte’s election has prompted a spike in drug-related killings, with more than 2,000 deaths since he took office on June 30, nearly half of them in police operations.
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