Catherine Alomia sat in her crib at the Montelibano Hospital here, too weak to move or even to cry. The 8-year-old weighs less than 28 pounds, a little more than half the normal weight for her age. She also suffers from a fever, cough, diarrhea, anemia, bronchopneumonia and, possibly, tuberculosis.

In the crib opposite Catherine's, 5-year-old Mylene Arguelles stands or squats on spindly legs, staring ahead dully, her face expressionless. A chart on her bed says she weighs 15 pounds, far below the normal weight of 39 pounds for girls her age.

In the crib next to Mylene's, a vitamin deficiency associated with severe malnutrition already has made 3-year-old Ignacio Gomasa blind. His father is preparing to take him home, since the hospital can do nothing to restore his sight.

The future also looks grim for Catherine and Mylene. Their impoverished parents do not earn enough to give them the nutrition they need, and now there will be more mouths to feed.

Maria Nita Alomia, Catherine's 30-year-old mother, the wife of an impoverished fisherman, is six months pregnant with her sixth child. Mylene's mother, Conchita, 31, who lives with her unemployed husband on an abandoned sugar plantation, just delivered her sixth baby in the hospital's maternity ward as relatives watched over Mylene.

Many of the children here will eventually die of the diseases that their malnourished bodies are too weak to fight, doctors say. Often, their parents are too poor to afford coffins and must bury them in cardboard boxes, formerly filled with dextrose, that the hospital provides.

The fetid malnutrition ward of this dilapidated hospital is "just an indicator of the whole problem" on the central Philippine island of Negros, said Roque Hofilena, the director of a feeding program sponsored by the United Nations Children's Fund, known as UNICEF. "The thing we fear most is the effect on the brain. The body can recover, but the brain damage is done."

Of the 2.2 million population of Negros Occidental Province, of which Bacolod is the capital, about 43 percent, or 946,000, are below the age of 15. Of these children, according to 1986 provincial government statistics, 74 percent are estimated to be suffering from varying degrees of malnutrition.

Another ugly side effect of the poverty that lies behind the malnutrition problem has been a growth of child prostitution here. Poor street urchins who beg daily around Bacolod's main square have become prey for pedophiles, most of them foreigners. "The sad thing is their parents probably even encourage these children," said Hofilena.

Since the brain grows most in the first four years of life, the damage being done to children like those in the Montelibano Hospital is "really horrible to imagine," Hofilena said. "We'll have a generation of children who are feeble-minded or retarded. Several hundred thousand children are growing up like that."

Despite a national outcry over the problem last year that prompted fund-raising drives in Manila and an international relief effort, severe and widespread malnutrition persists here. According to Hofilena, the aid has done little more than to keep the problem from getting worse.

Malnutrition is not the only problem on this sugar-producing island. Widespread poverty, a depression in the world sugar market, years of exploitation of sugar workers by feudalistic plantation owners, the activities of political warlords and a radicalized Roman Catholic Church have made the island of Negros a caldron of revolutionary agitation.

It is a situation that has worked to the advantage of the Communist Party of the Philippines and its armed wing, the New People's Army, which reportedly have grown faster on Negros in the past few years than on any other island in their nationwide rebellion.

"If this is not well handled, this will be the first province to explode," said the bishop of Bacolod, Antonio Fortich. "It is a social volcano."

"Of all the provinces in the Philippines, Negros is the most fertile for the communists," said a wealthy sugar planter.

The growth of the insurgency on the island, confirmed by both military and communist sources here, is evident in the behavior of the sugar planters, many of whom have abandoned their plantations or rarely visit them. Landlords are even reluctant to visit their farms on the outskirts of Bacolod because of rebel army indoctrination sessions that the insurgents call "teach-ins."

In Escalante, a city of 73,000 in northern Negros where at least 20 persons were killed by government forces during a protest march last year, procommunist slogans such as "Onward armed struggle" and "The NPA is in the city" have appeared in red paint on the walls of schools and other buildings.

The appointed acting governor of Negros Occidental, Daniel Lacson, has warned that if steps are not taken to solve the problems now, in two years the island will be lost to the revolutionaries.

In an effort to head off that prospect, Lacson is promoting a plan to diversify the sugar plantations that now account for about 65 percent of the province's arable land. Under the plan, the sugar planters would sell 30 percent of their land to the government to create agribusiness estates in which large foreign companies would be invited to invest. Another 10 percent would be sold at low prices to the plantation laborers at about a quarter of an acre per family. The planters would keep the remaining 60 percent.

Up to now, however, fewer than 1 percent of the planters have supported the plan, provincial officials said.

At the core of the problem are world prices for sugar and the hacienda system used to produce it here. About 440,000 farm workers depend directly on the sugar industry, which is practically the only one in the province and accounts for 55 percent of the country's total sugar production.

When prices were good, the sugar planters prospered and Bacolod flourished. Expensive foreign cars plied the city's streets, nightclubs and restaurants thrived, and, at one point in the 1970s, impresarios tried to book the Beatles for a Bacolod concert date.

But after a peak in 1974 when the world price of sugar reached 65 cents a pound, the market -- and the fortunes of Negros -- plunged. Contributing to the decline, planters say, was Roberto S. Benedicto, a close friend of former president Ferdinand Marcos and leading beneficiary of a monopoly on sugar trading.

Gambling that the price would reach $ 1 a pound, Benedicto hoarded sugar until warehouses overflowed, then stored it in empty swimming pools, on basketball courts, soccer fields and anywhere else that could be found, planters recall.

Then the market crashed, and Benedicto eventually had to dispose of the sugar at 10 cents a pound. But, with Marcos' martial-law backing, he passed on the losses to the planters, saddling them with more than $ 400 million in debts, plus interest.

"That was how the misery of the planters started," said an official of the New Alliance of Sugar Producers, which favors reforms in the sugar industry. Later, market forces and reductions in the U.S. sugar import quota added to Negros' woes.

Now sugar sells for 6.5 cents a pound. But Negros' production cost is about 12 cents a pound, a figure that planters say includes the heavy interest they pay on their bank loans.

Through it all, the worst hit have been the hacienda workers, most of whom were paid well below the minimum farm wage even in good times and lived at or below the poverty line.

For generations since the sugar industry was launched in the 1850s, these workers have accepted their lot because of the seasonal nature of the work and their total dependency on the master on the farm for housing, medical care, water supply, off-season pay advances and loans.

According to a 1983 study, four out of five sugar-farm households had incomes below the poverty threshold, with the average household of six earning about $ 433 a year. The gap between rich and poor has been growing wider. Today, according to labor union officials, most sugar workers receive less than half the minimum farm wage of $ 1.60 a day.

"It's true our grandfathers were sugar barons living a life of luxury, but times have changed," said Manuel Lacson, a leading sugar planter whose family corporation owns more than 1,200 acres of land. "The age of the sugar barons is gone. Negros now is in crisis.

"Our people have changed," he added. "There is hunger now. People are just eating sweet potato and cassava. The communists are very active here, recruiting members on every farm. The workers are easy prey for the communists. What have they got to lose?

"I hardly go to the farm now," he said. "Before, our word was law. But now the workers have changed their attitude. They have teach-ins every night, and if we go there we are met by armed people. There are many arms on the farm these days."

Last year, one planter was killed when he visited his farm to discuss a land distribution plan. "These are workers who are just waiting for the upper hand," Lacson said. "When they get it, there will be a bloodbath on Negros. Then we will take the first plane out."