GENERAL LUNA, PHILIPPINES -- In a primitive camp hidden deep in the mountainous jungle of Quezon province, several dozen Communist Party officials and peasant guerrillas gathered earlier this month to assess the 18-year struggle by the New People's Army to seize power in the Philippines.

Midway through a grueling week of lectures and discussions in a makeshift, palm-frond classroom, a veteran communist guerrilla leader offered a hard reminder to a rapt audience of young, zealous rebels.

"Cory Aquino is popular," said Ka Tibbs, a senior Communist Party official and 16-year guerrilla veteran. The guerrillas could only nod in silent agreement.

In the wake of a disappointing defeat for Filipino leftists in May legislative elections -- and a landslide victory for President Aquino's candidates -- Communist Party leaders and guerrillas in the countryside are reassessing their strategy for gaining power.

But even as the strategy debate continues in Communist Party circles, the guerrilla war is intensifying around the Philippines -- and the guerrilla army is continuing to add recruits and expand political control.

U.S. defense officials in recent weeks have publicly voiced concerns about Aquino's lack of progress in defeating Asia's only growing communist insurgency.

Even Aquino's defense secretary, retired Gen. Rafael Ileto, admits that the war against the New People's Army is not going well.

Ileto said earlier this month that the guerrilla army has grown by 9 percent in Aquino's first year in power, to about 24,000 rebel regulars, continuing a steady growth trend that began in the final years of Ferdinand Marcos' unpopular rule.

This reporter recently spent six days with Communist Party officials and New People's Army guerrillas in the Bondoc Peninsula of Quezon province, an area typical of the Philippine countryside. A top regional Communist Party official and a guerrilla escort accompanied the reporter to a concealed guerrilla camp about 140 miles southeast of Manila, reached after a six-hour car ride that passed through 11 military checkpoints and a three-hour hike over mountainous jungle trails.

In guerrilla parlance, the Bondoc Peninsula is a "consolidated zone" -- an area where the communists have established a shadow government with de facto control over most villages.

The peasant farmers produce food and provide shelter for the guerrillas and act as couriers and spies.

In this impoverished, sprawling and strategically vital province, the guerrillas appear to be winning largely by government default. Because of the threat of guerrilla ambush, the military has effectively ceded much of the Bondoc Peninsula, including the camp, to the rebels.

Only once during the six days with the guerrillas was there a reminder that any enemy army was in the area: a U.S.-supplied Huey helicopter of Vietnam vintage passed several hundred feet directly over the carefully concealed camp, but continued on its journey.

Several peasants interviewed through a translator said they support the guerrillas because the Communist Party and the rebel army have offered a clear vision of a better future, which they are so committed to that they live with the peasants and share their hardships.

The guerrillas also deliver to the isolated, impoverished barrios many of the services that the Manila government is either unable, or unwilling, to provide, including education, health care and training, land reform and technical assistance to farmers.

Despite the election setback suffered in May by a left-wing political party allied with the guerrillas, morale appeared to be high among the Quezon province guerrillas, more than 50 of whom were interviewed.

All appeared healthy, well-fed, well-armed and in high spirits.

The guerrillas' success on the Bondoc Peninsula offers a case study of how the New People's Army has achieved considerable growth and support in at least 25 of the Philippines' 73 provinces, and how the guerrilla army is able to operate in 63 provinces.

The New People's Army was organized in March 1969 by about 50 Communist Party intellectuals and peasants in Tarlac province, Aquino's home province, 75 miles north of Manila.

The guerrillas established a "front" in southern Quezon province in the mid-1970s.

At the outset, the guerrillas were armed with handguns, homemade shotguns and a few automatic rifles, rebel veterans recalled.

But underscoring their battlefield successes, the Bondoc-area rebels now operating can muster more than a company (about 250 guerrillas) armed with M16 automatic rifles captured from the Army, guerrilla leaders said.

However, rebel leaders and Philippine military authorities agree that the political successes in underdeveloped rural areas such as Bondoc are far more impressive than the number of guerrillas.

The Communist Party has succeeded in establishing "revolutionary councils" in most barrios on the peninsula which act as shadow governments at the lowest political level, and in some cases include duly appointed government officials. The party has also positioned political organizers to oversee the indoctrination of villagers and the implementation of party-supervised programs.

In several barrios, communist doctors have trained peasants to provide health care and even perform minor surgery.

The communist organizing efforts are backed by the threat of armed violence. Villagers who choose to work with the military run the risk of guerrilla summary execution.

To further organize and control the "basic masses," the Communist Party has set up underground organizations for each part of society, including farmers, public transportation drivers, teachers, students and shopkeepers.

Guerrilla leaders concede that Aquino's popularity poses a formidable obstacle for the movement, but they view the Philippine president as merely a short-term problem. Communist officials maintain that they have survived the most critical period -- the first year of Aquino's rule -- with few defections, and even continued growth.

What remains to be seen is whether the guerrillas can parlay their pockets of current strength into a movement capable of seizing power. Such a scenario, communist officials concede, is at best five to 10 years distant.

In the meantime, communist officials are debating short-term strategies, such as whether to further escalate the guerrilla war, or to devote more energy to political efforts, including the participation in elections through front candidates.

Senior Communist Party officials Satur Ocampo and Antonio Zumel recently conceded that the disappointing election results remind them that a communist victory remains a distant dream. Significantly, however, the political setback appears to have had little effect on the guerrillas' enthusiasm in the countryside.