The stick insect is wingless, lives on the ground rather than in trees, and is spectacularly coloured, having a green-blue head and orange body.
The insect also vents a foul-smelling spray to deter predators.
The stick insect is so unique that scientists have given it its own genus and do not yet know its relationship to other stick and leaf insects.
"Recently a colleague, entomologist Oskar Conle, showed us some museum specimens of a strange-looking stick insect found several years ago on Mount Halcon, a remote locality in the Philippine island of Mindoro," explains Marco Gottardo, who is studying for a PhD at the University of Siena, Italy.
The insect was found on the third highest mountain in the archipelago, which is considered one of the richest areas of biodiversity in the world.
"We were baffled. It looked so different from any other known stick insect in the world that we immediately realised it was something very special."
Mr Gottardo and colleague Philipp Heller carefully examined the specimen.
"We concluded that it represented an unknown genus and species of stick insect," Mr Gottardo told BBC Nature.
The scientists have published details of the discovery in the journal Comptes Rendus Biologies.
"The new stick insect is wingless, with a stout body and rather short legs," says Mr Gottardo.
The scientists think these features are likely to be special adaptations for living in the low-growing vegetation of a montane rainforest.Most tree-dwelling stick insects that live in the forest canopy have slender and elongated bodies and legs, thought to provide good camouflage among stick and leaves.
"Another unique characteristic is the spectacular colour pattern. [A male] has dark bluish-green head and legs, and a bright orange body with distinctive bluish-black triangle-shaped spots on its back," he adds.
It is more likely that the insect uses these striking colours to warn off predators, rather than as a form of camouflage.
"In fact we have discovered that the new stick insect has the ability to release a potent defensive spray from glands located behind its head.
"The defensive substance is sprayed when the insect feels threatened, and has a strong distasteful smell, which likely functions to repel potential predators in a similar way to skunks," says Mr Gottardo.
Enigmatic origin The scientists have named the insect Conlephasma enigma.
"We have named the new stick insect with the specific epithet "enigma" because its systematic position in the tree of life of stick and leaf insects remains a mystery," says Mr Gottardo.
Many of the stick insect's distinctive features are unlike those recorded on other stick insects.
One feature, however, has been seen before. The microstructures of Conlephasma enigma's mouthparts are strikingly similar to those held by another group of stick insects. The problem is that these stick insects live in tropical America, on the other side of the world, raising the question of how two insects so far apart might share a similar trait.
The researchers hope that a more detailed molecular analysis of the stick insect's genetics may shed light on its true identity.
"We also hope that the discovery of this particular new insect species may draw attention into the problem of rainforest conservation in the Philippines, which are home to unique and still poorly known wildlife," Mr Gottardo says.