The best way to stop terrorism is by treating everyon with compassion and by teaching people not to hate. Hate breeds hate, so there is nothing good that can come from banning Muslims. They may retaliate for being banned from the city, which is not good for anyone Muslim or not.
I think that the decision of the Filipino mayor to order Muslims out of his city could absolutely lead to violent actions and political unrest. Any time a specific race, ethnicity, gender or group of people is targeted, a great deal of anger and resentment can develop. These feelings often lead acts of retaliation, many of which are violent in nature.
They will regret their racism towards the Muslims. When you punish an entire group of people for acts of a few it is only a matter of time before Karma steps on your doorstep. The terrorist are hoping and praying for things like this to happen so they can justify what they are doing. Cooler heads have to prevail.
No, it is unlikely that terrorism will rise when the city's Muslims leave. The vast majority of Muslims do not support terrorism in any way and will not turn to such barbarism despite the Mayor's insensitive decree. Those who were already inclined towards terrorism may be aggravated, but it is unlikely to make a difference in the grand scheme of things.