By an extortion gang with links to Muslim militants.. The bus was traveling with more than 50 passengers when the powerful blast shook the rear of the vehicle from the overhead compartment, police Chief Superintendent Gil Meneses said. The force of the explosion was so strong it decapitated two of the victims, he said.. Ten people, including the bus conductor, died in the blast in Matalam township in North Cotabato province, said police spokeswoman Senior Inspector Joyce Birrey.. No one immediately claimed responsibility for the blast. The southern Philippines is home to kidnappers, extortion gangs and a decades-old Muslim insurgency.. President Benigno Aquino III condemned the bombing and ordered police to step up security at possible terrorist targets.. Police and army units interviewed survivors and examined the twisted metal and other debris to determine the type of explosive, Meneses said. An ordnance team said it appeared to be an 81mm mortar round that was remotely detonated using cellular phones.. The driver told police three men who boarded the bus along the highway got off minutes before the blast.