Two-year-old Jay-R Bontilao was killed on the spot while his 20-year-old cousin Mary Kris Berdon died five hours later at the Vicente Sotto Memorial Medical Center in Cebu City.
Bontilao's parents, Jay and Mary Jane, 26 and 23, respectively, as well as a neighbor, Neneth Mingo, 18, are in the same hospital with varying degrees of serious injuries and burns.
Lapulapu City police investigator Francisco Baguio said the explosion ripped the house of the Bontilao couple in sitio Radar, barangay Babag II apart shortly before midnight while Mary Kris was busy packing firecrackers.
Baguio said three friends of the Bontilao couple were also in the house at the time. He identified them as Noel Racuma, Danilo Lopez and a certain Jake.
Both Racuma and Lopez also worked in the pyrotechnic industry and had dropped by from their own similarly clandestine factory nearby.
Babag is the seat of the pyrotechnic industry in Lapulapu City.
The two-year-old Jay-R was sleeping at the time of the explosion.
Prior to the explosion, Baguio said Mary Jane had asked Racuma to stop smoking inside the house because of the huge stock of firecrackers there.
The warning allegedly prompted Racuma to dispose of his cigarette by flicking it outside the house.
It was not clear if the still lighted cigarette butt actually landed outside, but a few moments after that, the neighborhood shook from a very loud explosion, followed by a series of secondary blasts as the house of the Bontilaos caught fire.
Racuma was invited for questioning but he denied he had caused the explosion. He even denied having thrown a lighted cigarette anywhere, prompting police to let him go.
Florencio Berdon, also a relative, said he tried to help by punching a hole through the bamboo slat wall of the house to get to the sleeping boy but a wall of fire instead greeted him.
The accident happened just as the Lapulapu City police was about to meet with fireworks makers and dealers in Babag to remind them again about the need to ensure safety among players of the industry.
Lapulapu City police chief Louie Oppus said a meeting was to have been held on October 21 between firecracker makers and Camp Crame officials.
According to police records, there are only three fireworks makers in the city that have been issued permits.
The Philippine National Police is the only agency the issues licenses to manufacturers and suppliers of pyrotechnic chemicals. Those who wish to sell firecrackers must also get permits from the mayor and undergo a safety seminar at the Bureau of Fire Protection.
Grace Pongasi, owner of J.P. Fireworks, a duly-licensed manufacturer, said despite the campaign of the police, a number of residents continue to engage in the business without permits.
Pyrotechnic makers in the barangay are mostly unlicensed and their homes are literally combustible hideouts.
Data from the Philippine National Police showed that in the last four years, at least three people have been killed because of firecracker-related incidents while scores of others have been maimed and injured.
Pyrotechnics have been blamed for no less than 338 fires nationwide over the same period.
Some of the children assist their parents in making ficrecrackers in barangay Babag.
Because of Babag, Lapulapu City has become the country's second largest pyrotechnics manufacturer after Bulacan but it is the largest employer of children in the industry.