President Gloria Macapagal Arroyo, in July 2006, broke from what was accepted as the “politically correct” post-1986 policy regarding the Maoist insurgency in the country. She asked the Armed Forces of the Philippines (AFP) to conduct a total effort to eradicate the insurgency by the end of her term of office and requested businessmen to refuse to pay “revolutionary taxes” demanded by the rebel group. To underscore her determination, she ordered the budget secretary to immediately make available an additional P1 billion to purchase the equipment required by the intensified counter- insurgency effort. The military immediately responded by transferring three combat battalions from Mindanao to the three pilot areas of the effort in the main island of Luzon.

The communist insurgency remains, without doubt, a military problem. There has been constant debate, however, over whether this is a problem with a principally military solution.

Over many years, those critical of a principally military approach to the lingering insurgency argued that the rebellion is based on valid social discontent. A “lasting” approach to the problem of insurgency should be based on addressing the social discontent. Government should, according to this position, approach the insurgency as a development question by attacking the poverty in those communities where the insurgency breeds.

This “development-based” approach to the insurgency has, in fact, been the dominant, politically-correct paradigm observed over the past two decades. The results have not been particularly impressive. Most frequently, this approach produced chicken-and-egg situations where all the best effort to bring investments into the most depressed provinces failed precisely because of the inhospitable business conditions caused by the presence of insurgents. Hundreds of business ventures have failed because of onerous “revolutionary taxation” enforced by the New People's Army (NPA). Hundreds of entrepreneurs who could have led in liberating the poorest communities have either fled because of threats from the rebels or have been killed.