Initial reports identified the victim as Louie Melanio, a conductor of Victory Liner who died instantly from the blast.
Bus driver Angelito Espejo was injured after sustaining head injuries, police said.
Central Luzon police director Chief Superintendent Ismael Rafanan said the explosion took place at the Victory Liner bus terminal in Bajac-Bajac, Olongapo City around 4 p.m.
Rafanan though refused to say if the initial investigation showed the explosion was caused by a bomb.
"We are still investigating the case. Our team from SOCO (Scene of the Crime Operative) are collecting pieces of evidence to be able to establish what kind of explosives was planted in the bus," Rafanan said.
Investigators said their initial investigation showed Melanio was helping Espejo clean up the bus at the terminal immediately after passengers disembarked after the trip from Pasay City.
Bus terminal janitor Ramil Ravanes claimed seeing Melanio trying to retrieve a box containing a stereo component inside the bus apparently left behind by a passenger.
Ravanes claimed the stereo suddenly exploded when Melanio picked it up, killing the victim instantly and throwing him out of the vehicle.
Espejo, on the other hand, sustained injuries in the head caused by the explosion, police said.
The explosion also triggered a fire that partly gutted the bus.
Superintendent Angelito Pacia, Olongapo City police chief, said the SOCO is still investigating the cause of the explosion.
"I have directed SOCO to conduct a full investigation on the matter and find out the origin of the explosion, if it is a homemade bomb, fireworks or possible faulty wiring," Pacia said.
Olongapo Victory Liner Branch manager Pocholo Galian said the company will shoulder all expenses for Melanio and Espejo. — With Cecille Suerte Felipe, AP