Behind the Story : Philippine Rebels Down but Not Out : Despite government claims, the war to create a Maoist state is far from over.

President Corazon Aquino took understandable pride in telling the graduating class of the Philippine Military Academy here last month that her government had “broken the back” of one of the world’s last Communist insurgencies.

“Soon,” the outgoing president promised, the rebels would be only “an occasional nuisance to public order and safety.”

Not yet, however. Apparently unknown to Aquino, well-armed guerrillas of the New People’s Army, the armed wing of the outlawed Communist Party of the Philippines, had the day before made their own statement in Surigao del Sur province on the southern island of Mindanao.

In a deadly cross-fire, well-hidden NPA troops armed with automatic weapons, grenade launchers and mortars ambushed two companies of soldiers from the army’s 23rd Infantry Battalion as they walked down a lonely mountain road. The government death toll from the five-hour firefight was the worst in nearly a decade: 42 soldiers dead, 16 wounded and five captured. The NPA admitted to six dead.

As the outraged military poured up to 2,000 troops into the area, gruesome details emerged. From his hospital bed, a wounded sergeant told reporters that the attackers--including boys as young as 12, he and others insisted--had executed wounded officers, beheaded and mutilated bodies, and looted weapons, clothes and valuables. There was no independent confirmation, and the NPA issued statements denying the “so-called atrocities.”

In any case, the Surigao slaughter, and scattered clashes elsewhere in recent weeks, have raised obvious doubts about the Aquino administration’s claim that it has nearly beaten the 23-year-old insurgency, and will achieve the long-promised goal of “strategic control” of 80% of the countryside by year’s end.

Evidence strongly suggests that the NPA has lost ground, fighters and public support in the last three years--signs of progress in a low-intensity, counterinsurgency conflict. Publicity about bloody internal purges and power struggles that left scores dead, followed by the collapse of communism in the Soviet Union and Eastern Europe, clearly have undercut the insurgents’ popular appeal and ideological fervor.

Partially as a result, more than 125 provincial and central NPA commanders have been arrested, and detailed computer discs, documents and other intelligence materials have been seized. Last week, for example, the army announced the capture in a Manila suburb of Ricardo Capili Reyes, reputed No. 3 in the rebel hierarchy and acting secretary general of the Communist Party.

“Unlike before, when they were the hunters, now they are the hunted,” said Brig. Gen. Emiliano Templo, deputy chief of civil and military operations. “They are on the run.”

But analysts warn that the war to create a Maoist state is far from over. According to current military estimates, the NPA still fields 15,450 armed guerrillas. That’s down from an estimated high of 25,800 in 1988, but hardly a spent force. There’s no way to confirm the figures.

Some analysts fear the breakdown of the NPA command structure may lead to more urban terrorism, such as the kidnaping for ransom of California oil executive Michael Barnes in Manila on Jan. 17. Another NPA command has held Arvey D. Drown, a Colorado businessman, since October, 1990, in northern Luzon and demands a military withdrawal from the war zone in exchange for his release. The announced pullout of the last American forces in the Philippines by the end of this year, long an NPA demand, appears to have had little impact on their military campaign.

“To break the back means to cause the disintegration of the NPA,” said Francisco Nemenzo, an expert on the insurgency and chancellor of the University of the Philippines in the Visayas. “It hasn’t reached that point. . . . They’ve suffered a lot of setbacks, and they’re quarreling among themselves. They’re not in position to seize power in the near future.”

“At the same time, you cannot say it will disappear,” Nemenzo added. “As long as there is exploitation, abuses by the military, human rights abuses and social grievances, they will not go away. The NPA will always be around.”

A Western military attache in Manila agreed. “I think the overall trend has been positive,” he said. “The NPA has seen its influence wane. They’re on the defensive, both politically and militarily. But the insurgency is pretty hardy here. It’s not rolling over and disappearing.”

For now, the NPA strongholds remain in northern Luzon, the island of Samar, parts of Panay and Negros, and northeastern Mindanao. Commands are often fractured, and in some areas, units have taken to banditry and extortion in the guise of revolution.

But the military is often little better. An NPA procurement officer, captured early last month, said that the Mindanao rebels in the Surigao slaughter had bought their weapons, ammunition, gasoline, boots and other combat gear from corrupt soldiers.

“Even if it’s embarrassing, we admit it because it’s true,” Defense Secretary Renato de Villa later told a press conference. Other officers conceded that sloppy tactics and poor leadership had contributed to the carnage.

In theory, the military uses a strategy of “constriction,” sending troops to clear a contested area, then deploying armed militia to hold it, and finally using civilian agencies to provide basic services. In practice, the coordination is spotty at best. And the cost has been high.

Last year, the military says, 489 civilians and 752 soldiers, police and militia were killed. Thousands of families became “internal refugees,” forced by fighting to flee their homes. About 1,476 NPA fatalities were reported. But those figures are suspect in a war where innocent victims are often portrayed as targets, and where human rights are frequently violated by both sides.

Indeed, Amnesty International, the London-based human rights group, last month accused the Philippine army and government-backed forces of killing at least 550 unarmed people, including children, in “extra-judicial executions” since 1988.

“Whole families have been gunned down,” according to the report.

Gen. Lisandro Abadia, armed forces chief of staff, angrily denounced the report as “a rehash of old charges,” and said there was “malice in the timing” of its release several days after the Surigao battle. Another general, who asked not to be identified, simply shrugged. “This is a dirty war,” he said. “We do what has to be done.”

Last year, for example, the military launched Operation Net Snare 2 against long-held NPA bases in the remote Sierra Madre and Cordillera mountains of northern Luzon, the main island. About 20,000 troops in two divisions were deployed against what are believed to be several thousand of the NPA’s best trained and most experienced fighters.

“They use hit-and-run,” said Lt. Col. Osbaldo Biri, an adjutant at the 501 Brigade base in Tuao, where four clattering helicopters ferried troops and supplies to the front. “They won’t stand and fight.”

At least 50 soldiers have been killed in NPA ambushes and fierce company-size skirmishes. Others fell to snipers, mines and bamboo booby traps. The military has fought back with intermittent bombing by aging T-28 planes, strafing by helicopter gunships and shelling by artillery, especially in the 10-mile-long Marag Valley.

The battle is nearly won, boasted Brig. Gen. Edgardo Batenga, head of the 5th Infantry Battalion, at his heavily guarded headquarters in Gamu, in northeastern Luzon. “We have destroyed the provisional government and the political infrastructure of the NPA there,” he said.

To prove it, he had aides fetch “Ka Lorie,” nom de guerre of an NPA political and propaganda officer who was captured last month when her unit was caught bathing in a stream near Lasam. At 23, she is shy, petite, and wears a pageboy hairdo. Only the shrapnel wounds on her right wrist and left leg suggested her life as a soldier.

She joined the rebels in 1988 after her family was brutalized by a military patrol. “The NPA was the only ones to help us,” she said. “That’s why I began fighting for the people against the evils of government.”

Despite her capture, Ka Lorie remains defiant. She criticized the military for abusing villagers, illegal logging and corruption. And she only laughed when asked whether the NPA was nearly finished. “In 10 years we will win,” she said.