Since 2000, more than 20 bombings have rocked this politically unstable town, home to some 30,000 Muslims and Christians.
Parang Mayor Talib Abo, chairman of the municipal peace and order council, said he was stunned to receive such an extortion letter.
Worse, Abo said the jeepney driver, who delivered the letter to him, was also surnamed Abo.
The mayor said the driver, Ruben Guiam Abo, told him that a man merely requested him to deliver the extortion letter, neatly placed in a white envelope, to him.
Later, in a cellular phone call, Abo said the extortionist said they would bomb populated areas here if their demand is ignored.
Vice Mayor Adnan Biruar also confirmed having received an identical letter.
The last bombing to happen here was on Jan. 4 last year when an improvised explosive went off during a basketball game in the municipal gymnasium, killing 18 people and wounding at least 60 others.
Last week, North Cotabato policemen arrested two men who tried to extort P2 million from the mayor of Kabacan town.
The suspects were nabbed while they were trying to open an account in a branch of the Land Bank of the Philippines in Midsayap, North Cotabato where Kabacan Mayor Luzviminda Tan was supposed to deposit the amount.