Residents flee as military targets fighters hidden in Southern villages.
He said the separatists executed the leader of Libertad village in Kauswagan town and added that there were reports that the attackers took a number of civilians hostage.
Government troops in armoured vehicles battled the fighters in efforts to push them back into the hinterland, where they maintain camps.
Local officials ordered the evacuation of nearby communities to avoid casualties.
Eid Kabalu, an MILF spokesman, confirmed the attack, but said it was carried out by a renegade commander, Abdullah Macapaar, also known as Bravo, and without the knowledge of the group’s leadership.
Kabalu confirmed that the attackers were members of the 12,000-strong MILF but said he was checking what triggered the attack.
Rodolfo Garcia, the head of the government’s negotiating team with the MILF, called the attack on the towns a violation of a 2003 ceasefire.
He said government officials were trying to get through to the MILF in an effort to get them to control their fighters.
The MILF has been waging a 30-year guerrilla campaign for a separate Islamic state in the south of the largely-Christian Philippines.
The separatists signed a ceasefire with the government in 2003 to open the way for peace talks, and both sides said in July they had completed a draft agreement for recognition of MILF’s “ancestral domain” in the south.
However, the agreement on the size of a Muslim homeland and a future government’s powers, including rights over exploring and developing mineral reserves, oil and gas, was halted amid protests by local Catholic politicians in Mindanao.
The Supreme Court suspended the draft accord, raising new tensions, earlier this month.