Most of the victims were food vendors and children, reports CBS News Correspondent Gaby Tabunar.
The country, one of Washington's biggest supporters in the war on terrorism, already had been on high alert, which officials credited with keeping the death toll from being even higher. A March 4 bombing at Davao's international airport killed 21 people, and a rash of explosions and ambushes elsewhere in the violence-prone south has killed dozens since October.
A Muslim rebel group, accused of carrying out the March bombing, condemned the latest attack, which also injured 40 people, as a "heinous act" by a "lunatic."
President Gloria Macapagal Arroyo planned to go ahead with a scheduled visit to Davao on Thursday. But she said the city was "in a state of lawless violence," adding she would order the military, normally in charge of external defense, to help police crack down on "lawless elements and terrorists."
With a ship getting ready to leave, the area outside the wharf's gates — where passengers can catch public transport or grab a bite to eat at a line of food stalls — was teeming with people when the bomb went off around 7 p.m. (1100 GMT), digging a shallow crater along the highway in the city's Sasa district.
Farewells turned to cries of pain and anguish. Health official Dolores Castillo said many victims were vendors and children. A Roman Catholic nun who had just arrived on a boat from Zamboanga city was killed as she sat in the back of a car stalled in traffic while leaving the wharf. Another nun and the driver were injured, witnesses said.
"I ... saw people shocked, speechless, crying and just watching bodies scattered on the ground a few seconds after the blast," said Larry Laura, 39, who was driving a van into the pier when the bomb went off about 100 meters (yards) away.
Police chief Supt. Isidro Lapena said initial investigations indicated the bomb was stashed in a barbecue food stall.
"We think the security at the pier worked because the attackers were not able to bring the explosive inside," Lapena said.
A determined Arroyo, who chastised officials at Manila's international airport and largest mall for lax security during surprise visits last week, went on radio to urge vigilance.
"We must not be intimidated," she said. "The police and the military alone cannot do the job. This is a total war requiring the full attention and resources of the entire community. Each citizen must be the eyes and ears to sense danger and initiative to immediately report to authorities."
Tough-talking Davao Mayor Rodrigo Duterte, who vowed to hit back at terrorists and insurgents following the March blast, asked people to avoid carrying bags, including backpacks, in the city unless they were traveling, saying he has ordered police to inspect them for possible bombs.
"I strongly condemn this cowardly monstrous and dastardly act," Duterte said. "Once again, the same criminals and terrorists are testing our patience and strong resolve to continue with our lives despite what had previously happened to us. But we will not be cowed and will never allow them to succeed."
Arrest warrants were issued after the March bombing for leaders of the Muslim separatist Moro Islamic Liberation Front.
MILF spokesman Eid Kabalu condemned Wednesday's attack.
"This is a crime against humanity," Kabalu said. "This heinous act has no place in the MILF. We want this investigated and again like in the first attack, we would be offering our assistance. The attacker is a lunatic, a crazed man, killing innocent people. Politically there is nothing to gain from this attack."
The guerrillas also denied responsibility for the March bombing, suggesting the military might have staged it to justify a planned deployment of U.S. troops in the southern Philippines. The deployment was put on hold after Philippine officials balked at Pentagon statements suggesting U.S. troops might be allowed to participate in combat against the Muslim extremist Abu Sayyaf group.
At Malaysian-brokered talks in Kuala Lumpur, government negotiators and MILF officials said Sunday they have agreed to work toward resuming stalled peace talks and halting fighting which has raged in recent weeks.