The bomb attacks came amid rumors of an impending coup by forces loyal to jailed former President Joseph Estrada.
The explosions partly damaged the packed third and ground floors of the Ever Gotesco Mall, and set off a stampede where most of the victims where hurt.
The wounded were taken to the Manila Central University MCU) Hospital on EDSA in Caloocan City and authorities immediately sealed off the mall after the blasts.
Interior and Local Government Secretary Jose Lina said police investigators were looking into the incident and were not discounting terrorism.
But Superintendent Ray Castro, Caloocan City police Station 2 chief, said the bombs were hurled by members of the Martilyo Gang which specialized in robbery of jewelry shops.
The group reportedly got its name from its practice of smashing with a hammer the showcases of the shop they were robbing.
Initial investigations showed that at least five members of the gang entered the Seiko Jewelry Square on the third floor of the mall, then smashed one of the showcases, but called off the heist after one of them was wounded by a piece of broken glass.
The owner of the shop, identified only as Mr. Ching, said the thieves were not able to steal anything.
To avoid being arrested, one of the suspects rolled a grenade as they fled.
The grenade exploded beside the Homework Hardware where security guard Jose Preña was in a huddle with Jeffrey Fernandez, driver of Ching.
Both men were among those wounded, with Preña listed in critical condition at the MCU Hospital.
The first explosion reportedly took place at 5:05 p.m., followed about one minute later by another grenade blast at the ground floor of the building where 10 other members of the robbery gang were believed to have positioned themselves as lookouts.
Police identified five of the gang members as Army Sgt. Ruben de Castro, 39; Khadafi Hamsa, 38; Toks Abdulaa, 20, Aratok Colinlang, 37; and Joel Mama, 26.
Probers have recovered from the blast sites a safety pin, shrapnel and a grenade lever.
The incident further heightened tension in Metro Manila which has been in the grip of a political crisis triggered by the arrest of Estrada on charges of plunder and graft filed by state prosecutors before the Sandiganbayan.
Tens of thousands of Estrada supporters overran the historic EDSA Shrine in Mandaluyong City where they launched their own version of people power to unseat President Arroyo and reinstate Estrada.
The pro-Estrada rally enters its sixth day today.
Mrs. Arroyo warned earlier against "misguided elements" exploiting the situation to aggravate situation.
Malacañang deplored the attack, saying it would not help defuse the volatile situation prevailing in the country.
"We condemn this horrible and dastardly act," said Presidential Spokesman Rigoberto Tiglao.
He said the Philippine Charity Sweepstakes Office and the Department of Health have been instructed to assist the victims.
"We will make sure that a thorough investigation is being undertaken and that all possible assistance will be extended to the victims," Lina said.
He vowed full transparency in the probe.
The militant Bagong Alyansang Makabayan also assailed the bombings and tagged forces loyal to Estrada as possible suspects.