By William Branigin

AS A U.S. FOREIGN policy crisis, the Philippines has all the ingredients: a growing communist insurgency that an aging president, a longtime U.S. ally, no longer seems able to control; a major U.S. stake in the country that includes two big military bases and investments worth more than $1 billion, and a large measure of prestige tied up with the fate of America's only former colony.

The signs are increasing that the archipelago of nearly 53 million people is shaping up as a flashpoint that could become a foreign policy crisis for President Ronald Reagan before his term is up. Should the Philippines, with its 87-year association with the United States as a colony and ally, come under communist rule, American foreign policy would at least suffer a serious loss of face in Asia if not also a loss of a significant strategic base of operations.

In a nutshell the problem is this: President Ferdinand Marcos, 67, has become the communist rebels' greatest asset and a liability for U.S. policy. Entrenched in power for 20 years -- longer than all previous Philippine presidents combined since the United States granted independence in 1946 -- Marcos presides over a government widely viewed as tired, corrupt and inept and that seems incapable of instituting the genuine and sweeping reforms needed to redeem the situation and roll up the insurgency.

To make matters worse, Marcos often strikes visitors these days as a leader living in the past. He begins to reminisce about World War II at the drop of a hat, recalling experiences as a young lieutenant that won him a slew of medals. For example, in a recent interview he dismissed an armed forces reform movement as "traditional army griping" and launched into recollections of his own unit's complaints about food and clothing.

He still staunchly defends his declaration of martial law in 1972 (lifted in 1981) and argues that the communists are taking a beating because of the arrests of a few top leaders nearly a decade ago.

Convinced that he is the only person qualified to run the country, Marcos also suffers from delusions that he still enjoys widespread popularity. He cited a poll by an opposition newspaper that shows him leading 27 other potential candidates for president in 1987 as evidence of his popularity. The poll gives him 16 percent of the vote, with 41 percent divided among various opposition candidates, 14 percent for other pro-government candidates and 29 percent refusing to answer.

At the same time that his popularity appears to be slipping, the insurgent opposition to his regime seems to be gathering strength. What to do about the insurgency problem is a question that has come to plague increasingly pessimistic U.S. government analysts in the last couple of years.

When the Communist Party of the Philippines was founded in December 1968 and a few months later formed an armed wing -- the New People's Army (NPA) -- there was hardly much of a threat. By the communists' admission, they started with fewer than 100 guerrilla fighters on the island of Luzon and 35 old rifles and handguns.

Today, according to a government white paper, the NPA has about 12,000 guerrilla "regulars" and has established a "political and military infrastructure" in about 4 percent of the country's 42,000 villages. The May 1985 white paper said NPA "armed propaganda teams" occasionally visit another 9 percent of all villages and that the insurgents routinely collect taxes, set up shadow governments and dispense "revolutionary justice" in areas they control.

According to the guerrillas, the NPA's strength far exceeds the government estimate. They now claim 30,000 "full-time and part-time guerrillas" after having recorded "spectacular growth" since the end of 1983, when guerrilla ranks reportedly stood at 20,000. About 10,000 of the guerrillas are armed with "high-powered rifles," the insurgents say. They also claim to maintain "guerrilla fronts" in 59 of the country's 73 provinces bolstered by about 20,000 local militiamen.

The latest communist literature lists guerrilla activities in all of the country's three main island groups, with the greatest strength and most rapid growth on the southern island of Mindanao.

Whatever their numbers, it is clear that the insurgents have grown bolder and more aggressive in recent months. Raids on small towns and military bases by NPA units of company or even battalion strength have become common, and communist cadres operate fairly freely in the country's third-largest city, Davao.

The acting armed forces chief of staff, Lt. Gen. Fidel Ramos, said recently that guerrilla operations had increased 10 to 15 percent from last year, when the military recorded more than 3,500 "violent incidents" involving the communists, three-quarters of which the communists initiated. More than 3,200 people were killed in these incidents, the military said, including more than 2,000 government troops and civilians.

Defense Minister Juan Ponce Enrile estimates it will take 10 years to defeat the insurgency, and eventual success is seen as dependent on the armed forces' ability to carry out major reforms to win back the hearts and minds that it is losing now.

Although the Philippine armed forces has far greater numbers than the guerrillas -- about 150,000 active servicemen including the paramilitary Philippine constabulary -- and far more firepower, it has tended to lose ground to the guerrillas because of its largely defensive posture, its susceptibility to raids and ambushes and its poor relationship with the populace in many places. The military is often accused of various abuses, including "salvagings" or summary executions of guerrilla suspects, robberies, beatings, undisciplined behavior and involvement in a variety of corrupt practices such as extortion and gambling.

To draw the conclusion that the communists are gaining is not to overestimate the capabilities of the insurgents. No one is predicting an imminent takeover by the communists, who have been fighting Marcos for 17 years in a Mao-inspired "protracted people's war" aimed at gradually gaining control of the countryside and encircling the nation's cities.

But even the communists have been expressing surprise lately at how fast their struggle has accelerated, and their literature holds out the prospect of advancing their cautious timetable for military offensives combined with "popular uprisings" to establish a "People's Democratic Republic of the Philippines."

In their latest publication, the communists forecast a "strategic stalemate" between the New People's Army and government forces "within the next three to five years." However, this "revolutionary scenario" could accelerate rapidly if the political struggle outpaces the armed insurgency, as was the case in the Sandinista victory in Nicaragua, according to the communist assessment.

"With the unprecedented advance of the armed and political struggles, there is no more doubt that the U.S.-Marcos fascist reign is drawing to an end," the communist publication said.

A few years ago, Western and Philippine analysts tended to dismiss the prospect of a communist insurgent takeover here as far- fetched. Now, with the way things are going, some see it as distinctly possible, maybe even inevitable.

"Filipinos are going to make lousy communists," one Western intelligence source said recently. His comment presumed an eventual communist victory, which he was sure would prove painful for free-wheeling Filipinos unaccustomed to much discipline.

The United States, in all this, has been reduced to little more than a concerned bystander. U.S. leverage with Marcos is limited by the need to maintain two large military bases, Clark Air Base and Subic Bay Naval Base, that U.S. strategists consider vital to American and regional security interests. Some analysts consider U.S. policy on the Philippines virtually "hostage" to Marcos because of the bases.

Although no U.S. official will say it out loud, there is clearly a body of opinion that wishes Marcos would make a graceful exit before it is too late. This school of thought sees a new government as the only hope for meaningful reforms of an abusive, unpopular and inefficient military, a judicial system largely beholden to Marcos and a monopoly- ridden economy long dominated by a few powerful cronies of the president. This school also believes that almost anyone who heads it would be an improvement, with the notable exception of Marcos' erratic wife, Imelda.

The longer Marcos remains in power, according to this argument, the greater the communists' prospects of gaining ground, since Marcos is in effect a unifying and radicalizing force for the underground opposition.

Indeed, it is apparent from communist literature that one of the party's major worries is that Marcos will leave the scene prematurely -- that is, before the communists themselves are ready -- and be replaced by a moderate opposition figure. Clearly aware that it would be harder to justify waging their demanding "people's war" against such a new leader, the communists emphasize heavily in their propaganda that the entire system in the Philippines must change, not just the president.

This dependency helps explain why the communists had little enthusiasm for Benigno Aquino -- the popular moderate opposition leader considered to have the best chance of succeeding Marcos -- until after he was dead. His assassination in August 1983 while in the custody of military guards at the Manila International Airport precipitated a political and economic crisis that undoubtedly furthered the communists' long- term plans. But it also removed the one Filipino capable of uniting the badly fragmented political opposition against Marcos. In the view of the more pessimistic analysts, that murder thus may have doomed the prospects for peaceful change in the Philippines.

Now, nearly two years after the killing of Marcos' political archrival, the moderate opposition is as badly divided as ever. There is no unifying figure on the horizon, but a strong possibility exists that more than one opposition figure will run for president against Marcos when his current term expires in 1987.

The moderate opposition seems divided more by personalities and ambitions than by policies, and plans to unite behind one single candidate do not look promising. Already, the United Nationalist Democratic Organization, the largest opposition group, has nominated its leader, former Senator Salvador Laural, as its presidential contender, and a maverick former mayor, Reuben Canoy, has declared his candidacy on behalf of a party whose leader has repudiated him.

Another leading opposition party, the Liberal Party, is currently in the midst of a dispute between rival factions led by Member of Parliament Eva Estrada Kalaw and former Sen. Jovito Salonga, who recently returned from self-imposed exile in the United States.

Other potential candidates include parliamentarians Ramon Mitra and Aquilino Pimentel; Agapito Aquino, the younger brother of the slain opposition leader, and, possibly, his widow, Corazon Aquino.

For the United States, it is a dilemma sometimes likened to that faced in South Vietnam in the 1960s when Washington became disenchanted with President Ngo Dinh Diem. His ouster and murder led to a succession of coups and revolving-door governments, none of which was able to stem the communist tide.

Today, according to American officials, the United States is out of the business of installing new leaders in troubled Asian countries, never having been very good at it anyway. But even if Washington still were in that business, there would be no clear-cut choice, and no guarantee of ultimate success in putting down the rebellion.

In these circumstances, there is little for the United States to do but try to shore up Philippine electoral institutions -- for example, by urging Marcos to appoint an impartial commission on elections and allow the participation of an independent citizens' poll- watching group known as Namfrel and hope that democratic processes will produce a noncommunist alternative to Marcos.

Repeated calls for free and fair elections, a just resolution of the Aquino murder case, changes in the Philippine military to stop abuses and improve efficiency and an end to "crony capitalism" underscore American desire for electoral, judicial, military and economic reforms. But these calls are routinely denounced by Marcos supporters and opponents alike as U.S. interference in Philippine domestic affairs.

Such are the sensitivities about meddling -- real or imagined -- by the country's former colonial patron that if U.S. backing for any particular presidential aspirant were perceived here, it would probably mean the kiss of death for that candidate.

The communists, for their part, have been acutely conscious of a need to avoid past mistakes that led to the collapse of the communist Hukbalaphap rebellion in the early 1950s. In fact, it was criticism of the Hukbalahap's premature, all-out drive to seize power that caused young revolutionaries led by Jose Maria Sison to set up their own Communist Party in December 1968 and the New People's Army the following march.

Influenced early on by the precepts of Mao Tse-tung, the party committed itself to a slow, painstaking and self-reliant revolutionary process. But its lack of any significant foreign support (the NPA's arsenal consists almost entirely of arms seized from the military) has encouraged the evolution of an independent outlook that is sometimes critical of both China and the Soviet Union today.

Most of the party's venom is saved for the United States, however. Indeed, there appears to be a wellspring of anti-American feeling on which to draw, given the latent hostilities in the Philippines' renowned love- hate relationship with the United States. Then, too, the insurgents well realize that their revolution needs a foreign enemy that people can rally against, a constant that will still be there even if Marcos gives way.

So it is not just Marcos who is the target. It is the "U.S.-Marcos dictatorship."

The irony is that as much as some U.S. officials would like Washington to disassociate from Marcos, his demise is probably the last thing the communists want at this point. For his presence in the Malacanang presidential palace is practically a guarantee that the insurgency will continue o grow.