MANILA, JUNE 13 -- Secretary of State George P. Shultz said today that the Philippines' growing communist insurgency "must be tackled in more military terms," but he conceded that the United States has not provided President Corazon C. Aquino sufficient military aid to help more in rebuilding the country's ill-equipped, poorly trained armed forces.

"Where we have not provided the funds that we wanted to is in the support of her program to strengthen the military, and I think it's too bad we haven't been able to do that," Shultz said.

Still, he said, the "professionalization" of the military was "proceeding well."

Shultz made his comments to reporters aboard his plane before arriving here from Europe to start a 10-day tour of Southeast Asia and the Pacific.

After two days of rest and sightseeing, Shultz is scheduled to meet Aquino and newly elected members of Congress, and sign an agreement to turn over a $163 million installment of a $358 million aid package.

In a brief arrival statement, Shultz praised Aquino's success in reversing the country's economic tailspin and restoring democratic institutions, specifically with the new, U.S.-style constitution approved by voters in February and the new Congress elected last month.

He made no mention of the insurgency, which has become perhaps the most daunting of all Aquino's many problems.

Shultz told reporters on his plane that Aquino's initial policy of reconciliation with the rebels was "a rather sensible approach." He added, "Those who were criticizing her for not barreling in right off the bat really didn't take a very hard look at what the capability -- or lack of capability -- was at the time."

Now that the cease-fire has collapsed without a peace agreement, and few rebels appear to be taking advantage of Aquino's offer of full amnesty, Shultz said, "It {the insurgency} "must be tackled in more military terms."