The blast took place in Cordova town on nearby Mactan island as the five men were digging a tunnel on private property, looking for gold bars supposedly left by occupying Japanese troops in World War II.
Cordova Mayor Arleigh Sitoy said local officials only discovered the incident when the victims tried to sneak out of the town in a van.
Police theorize that the treasure hunters were using dynamite to blast a tunnel but one of the wounded men, Edilberto Aniana, denied this, saying they must have hit a bomb leftover from World War II.
For years, there have been rumors that during World War II, Japanese troops hid billions in treasure looted from Asia, in different places throughout the Philippines.
Numerous treasure hunters have been scouring the country for this fabled hoard for decades amid allegations that the late deposed dictator Ferdinand Marcos recovered much of it during his rule from 1965 to 1986.