A few years ago, the Communist New People's Army was practically unheard of on this southern Philippine island of Mindanao. The armed forces were concentrating their efforts against a Moslem secessionist rebellion being waged by the Moro National Liberation Front.

That rebellion now appears to be dying out, but the Communist insurgency, which Army officers say took the government by surprise, is spreading, and military and government officials here consider the New People's Army the greater long-term threat -- and one that defies a military solution.

In fact, of the Communist insurgencies in several Southeast Asian countries, the New People's Army rebellion is the only one that is growing.

A major reason for its gains here is the region's depressed economy and what some local officials view as chronic neglect by the government in Manila. Although the military appears to be coming to terms with the insurgency problem, no economic turnaround is yet in sight.

Government and opposition sources agree that the New People's Army owes most of its success in building popular support to its exploitation of economic grievances rather than to its military operations.

Some Philippine officials, including President Ferdinand Marcos, see the Communists' activities mainly as a problem of development.

"When the country is so economically stable and there are no pervasive reasons for valid grievances, they would not survive even in the countryside," Marcos said in an interview in Manila. "But, given developing countries' . . . continuous problems in this sector, then you have some areas that can be a host to the rebel groups." He cited in particular the islands of Samar and Mindanao.

"The problem is to continue to develop the region to contain this rebellion within certain levels. We're both racing against time," said a Philippine constabulary colonel in Davao, which with a population of half a million is the main city on Mindanao.

The colonel conceded that the New People's Army was growing in the area, "although no commander would admit it." He said, "This problem is going to be with us for some time," adding that "the long-term solution is never military."

In Zamboanga, which is on a beak of the island jutting westward, Maj. Gen. Delfin Castro, the head of the Philippine military's Southern Command, said the armed forces were increasingly devoting their attention to "supporting the socioeconomic program of the government." He said troops had been redeployed to deal with the New People's Army (NPA) in view of the declining strength of the Moslem rebels.

"We didn't look into the NPA problem, and it almost blew up in our faces," Castro said. "Our eyes were opened by local political leaders who complained that unless we did something, the NPA would become very strong and difficult to uproot."

Castro said that "thanks to this warning," the military transferred a crack Marine battalion and other forces to the remote, mountainous region of Davao del Norte and Agusan provinces at the end of May and succeeded in preventing the Communists from significantly disrupting the June presidential election.

Castro said that, unlike the Moslem rebels, the New People's Army strategy was to avoid battle with government troops unless mounting an ambush or a raid with superior numbers against a specific target.

"If they will only fight, we can defeat them militarily," Castro said. Because of their strategy, however, "the only way to defeat the guerrillas is by winning over their mass base," he said.

Opponents accuse the military of creating Vietnam-style "strategic hamlets" in which villagers are moved out of their homes to a secure location and allowed to return to work their land only during the day. Critics say the plan, introduced after the June election, is designed to cut contact between villagers and New People's Army guerrillas, but that such military evacuations of villagers sometimes have preceded takeovers of their land by agribusiness and mining interests.

According to New People's Army documents, the group claims to be "protecting the masses" from the military and big business. It claims to be fighting for land reform, to eliminate usury and to increase farm workers' wages.

"The NPA does not limit itself to guerrilla operations," a January 1981 document said. "While it has wiped out thousands of government troops, enemy informers, despotic landlords and others who bring harm to the people, the NPA assists the revolutionary masses in the implementation of the revolutionary guide to land reform of the Communist Party of the Philippines."

"It's misleading to look at the NPA as a straight insurgency," said a Western diplomat in Manila. "The NPA is not concerned principally with fighting battles, or even recruiting for its military. It's working to displace the government in delivering goods and services."

While the number of the group's guerrillas is not known, diplomats say it probably fields about 5,000 armed fighters, with about the same number of paramilitary supporters and considerably more sympathizers.

The group says it "has grown and strengthened itself in the course of resolutely waging people's war to overthrow the U.S-Marcos dictatorship. Starting with only 60 red fighters and 35 rifles in 1969 in one district in central Luzon Province, the NPA has grown to several thousand full-time guerrillas operating in 26 guerrilla fronts in 40 provinces," the January 1981 document said, adding that its regulars are assisted by an "armed people's militia" five times the size of its full-time forces.

The political direction of the New People's Army is provided by the Communist Party of the Philippines, which split from the Soviet-oriented Communist Party in 1968 and formed its armed wing the following year. It claims to have grown to "several thousand cadres and members."

Legal opposition sources, however, say the party has only about 600 to 700 members. When it was formed, the party took a pro-Peking line and espoused Maoist goals. But after Mao Tse-tung's death, a great debate erupted in the party over the direction of the new Chinese leadership, according to opposition sources.

Since then, the party has adopted a more indigenous model, using Mao's thinking, strategy and tactics, the sources said.

A nine-point program published last year is heavily laced with anti-Americanism. It demands nationalization of "all U.S. imperialist-owned and controlled industries and corporations," dismantling of U.S. military bases in the Philippines, abrogation of treaties and agreements with the United States and Japan and "an end to further loans from imperialist-controlled banks and imperialist governments."

Although many Philippine and foreign observers agree that the New People's Army has advanced its cause by providing some services to the rural poor, they also assert that the guerrillas often have resorted to coercion and murder to maintain their grip. Local officials and anticommunist groups accuse the NPA of collecting exorbitant "taxes," forcing farmers to do communal labor for one day a week and generally living off the peasants.

"If you are in the NPA, you get free food, a free house and a license to kill," said a police colonel in Davao del Norte Province.

While it is generally agreed that the NPA poses no immediate threat to the Marcos government, opposition sources say it is geared for a long-term struggle of 10 or 20 more years.

In the future, Western embassy observers believe, two major factors will help to determine the insurgency's course. One is what happens to the Moro National Liberation Front, whose more than 15,000 guerrillas once tied down well over half of the Philippine Army.

If the front rebounds from its current level of about 9,000 fighters, it would weaken the military's ability to deal with the Communists, the sources said.

The other factor is a source of foreign support for the New People's Army. Although Marcos has claimed the group now receives some foreign funding, diplomatic sources believe it is limited to its own resources.

"That factor could be completely upset if they find a sugar daddy somewhere," a diplomat said.

Other factors that seem to work against the Communist guerrillas include the geography of the Philippines. Although the New People's Army claims to have adapted a "mobile" guerrilla warfare suited to the Philippines, diplomats said the country's more than 7,100 islands and its formidable water, mountain and forest barriers make any coordinated revolution difficult, if not impossible.

"It's very hard to mount a revolution in an archipelago," said one Western ambassador. Other diplomats point out that guerrillas have been operating in the Philippines since the turn of the century, and particularly since World War II.

"Their numbers go up and down, but they never seem to go away completely," said one military observer. "There may always be armed groups in the hinterlands of this country."