The communists suspended peace talks in 2004, accusing the government of instigating their inclusion on US and European lists of terrorist groups.
The government has opened talks and has a ceasefire agreement with the Muslim separatist Moro Islamic Liberation Front.
"The Muslims of the Philippines want autonomy and equal rights - democracy has failed them so they have taken up arms"
Shafiq, Dhaka, Bangladesh
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The president's comments came as the military is stepping up its offensive against the Abu Sayyaf on two southern islands where around 55 troops and dozens of fighters have been killed since July.
Arroyo said the armed forces "must evolve a strategy of rapid conclusion to address rebellion".
She said the government would use "hard and soft power," a combination of military strength and efforts to win over rebels through economic development, social services and infrastructure.
Jukipli Wadi, a professor of Islamic studies at the University of the Philippines, told Al Jazeera that the military offensive could harm existing peace agreements.
"Some critics in the Philippines are saying that possibly this [military operation] is not just a question of wiping out the rogue elements of the rebels ... these are viewed as formed of vengeance on the part of the armed forces," he said.
Arroyo visited frontline troops on Basilan island, where the military have carried out several operations against Abu Sayyaf fighters in recent weeks, on Thursday.
General Hermogenes Esperon, the military chief of staff, said on Friday that the campaign in the southern islands aims to "put off balance" the Abu Sayyaf so its forces will not be able to launch attacks.
The government then plans a second phase of opeartions that will see two army engineering battalions sent to Jolo and a third to Basilan to build and repair roads, health centres and schools, he said.