The authorities have issued a warning that further eruptions are likely.
The blast from Mount Bulusan in the rural Sorsogon province lasted about 17 minutes, sending a grey plume shooting up at least one kilometre, according to the Philippine Institute of Volcanology and Seismology.
No casualties were reported, but the authorities raised the alert level to one on their five-level system, indicating "low-level unrest".
"There was a phreatic eruption of the Bulusan volcano, meaning the explosion was caused by the boiling water under the crater," institute head Renato Solidum told local radio DZBB.
A group of 14 hikers and four local guides were midway down the 1,565-metre mountain, unaware that an ash cloud was shooting up on the other side, civil defence official Leo Ferreras told AFP.
"All of them got down safe and sound," he said.
The local government of Sorsogon, about 500 kilometres south of the capital, Manila, said 10 villages in two towns were affected by the ash.
Images of the aftermath showed houses, roads and trees in Juban town covered in ash, with vehicles struggling to navigate the road owing to poor visibility.
The authorities sent a fire engine to clear the area, and residents helped sweep ash off the roads.
"The evacuation is ongoing there, but our priority is senior citizens and those with asthma," said Juban disaster official Dennis Despabiladeras.
The Manila International Airport Authority said no flights were affected by the eruption so far, although pilots were warned about coming near the area.
The authorities reminded residents that entry into the four-kilometre radius around the volcano is prohibited and advised those living next to it to be cautious "due to the increased possibilities of sudden and hazardous phreatic eruptions".
Residents near the region's valleys and rivers were also alerted about the danger of mud and stream flows in the event of heavy rainfall.
Bulusan has been active in recent years, with a dozen similar eruptions recorded in 2016 and 2017.
The Philippines is located in the seismically active Pacific Ring of Fire and has more than 20 active volcanoes.