Marga Ortigas, Al Jazeera's correspondent in Manila, said: "You can call it election-related violence.
"The NPA has been charging politicians a "permit to campaign". So if politicians give them money, the NPA will give them access to areas controlled by them and not cause them any trouble during the campaign leading up to elections in May.
"The authorities have come out and almost pleaded with politicians to not succumb to what they see as another extortion ploy by the NPA to buy guns and then fight the Philippines army.
"But some politicans have indeed been paying large sums of money to this communist rebel group.
"What happened today is that the army went in pursuit of one such group that has taken hundreds of thousands of dollars from several local politicans in the province.
"In the process, they were ambushed."
Money for votes
Colonel Romeo Brawner, a military spokesman, said there were an "undetermined casualties" on the side of the NPA during the ambush.
"The troops fought it out literally to the last bullet," he said.
More soldiers backed by helicopter gunships have been dispatched to track down the NPA fighters, he said.
The NPA has been fighting one of thelongest communist insurgencies in the world with over forty years of trying to establish state in the Philippines.
The rebel group has around 5,000 members and they no longer have fixed camps, instead travelling from village to village to blend in with the locals and gaining their trust, our correspondent said.