Secretary of State George P. Shultz praised Philippine President Corazon Aquino yesterday for advocating free-market principles, and said he was "bullish" on the Philippines despite the continuing problems of a battered economy and a growing communist insurgency.

"It is still early in her tenure, but already she has dispelled many initial uncertainties," Shultz told the Foreign Policy Association in New York. "Her government is off and running hard, and it is headed in the right direction."

He used the occassion to tell American businesses to "get off the dime and look aggressively at investment opportunities" in the Philippines. Noting the end of the large-scale capital flight that occurred during the waning months of the Marcos regime, Shultz said Filipino businesses must take the lead by investing in their own country to demonstrate confidence in the new government.

While emphasizing private investment, Shultz said other nations should follow the United States by increasing economic assistance to the Philippines. He also vowed to resist protectionist sentiments in this country which, he said, would harm countries like the Philippines that depend on access to American markets for their exports.

Shultz made note of the occassional discord among Aquino's cabinet members that has marked her first 100 days in office, a kind of disunity that led one prominent Philippine economist recently to compare them to "a jazz band, each playing their own tune." Shultz called this "the sound of democracy at work."

"The evolution of these policies under debate -- particularly those involving labor -- will continue to be of special concern to us, as well as to other potential foreign investors," Shultz said. He added that Aquino "has made clear that future articulation of labor policy will be done through the office of the president."

Shultz was referring to the controversy surrounding Aquino's outspoken labor minister, Augusto Sanchez, whose earlier remarks advocating more workers' rights and criticizing multinationals drew complaints from businesses. Sanchez was reportedly rebuked by Aquino recently for indicating sympathy for the May 1st Movement, a militant trade union believed allied with the communists that has been competing with the more moderate Trade Union Congress of the Philippines for Aquino's ear.

Some businesses are also said to be waiting for the Aquino government to articulate a policy for dealing with industrial disputes.