MANILA, December 28, 2010 (AFP) – Philippine President Benigno Aquino’s government on Tuesday denounced communist rebel extortion of businesses, which his spokeswoman said could scare away investments and jobs.

The government has learned that seven mining firms in the main southern island of Mindanao are threatening to pull up stakes after the New People’s Army (NPA) demanded they pay up or face attacks, Aquino spokeswoman Abigail Valte said.

Neither the presidential palace nor the army named the companies, but many mining firms operating in Mindanao and elsewhere have foreign equity stakes.

The issue cropped up amid a Christmas truce and ahead of formal peace talks in Norway in February next year, the latest bid for a political settlement to end a decades-long insurgency that has claimed thousands of lives.

“That (alleged extortion) is our concern so they have to discuss it,” Valte told reporters.

“It is against the law, so it should be stopped,” she said.

“It is very difficult for a government to attract investors into the country when they have to face this.”

Earlier, the Philippine army spokesman accused the 4,700-member NPA of using the Christmas truce to intimidate businesses into submitting to rebel extortion.

The NPA violated the spirit of the ceasefire by massing its forces on the main southern island of Mindanao on Sunday, knowing that the military could not attack them due to the truce, army spokesman Colonel Daniel Lucero said.

“The… display of armaments by members of the New People’s Army in Surigao del Sur (province) is a blatant abuse of the democratic space provided by the ongoing suspension of military operations,” Lucero said in a statement.

He alleged it was aimed at extorting money from mining companies operating in remote areas of Mindanao.

“In Surigao del Sur alone, seven mining companies have reported cases of extortion by the (rebels) with amounts reaching as high as 15 million pesos (about 338,000 dollars) per month per mining company,” he said.

The rebels have since demanded a 25 percent rise so their operations are not targeted, he added. Most of the mines in the region exploit nickel deposits.

The NPA’s parent organization, the Communist Party of the Philippines (CPP), said Tuesday “several thousand people” took part in a Mindanao jungle parade to mark the 42nd anniversary of the party’s founding on Sunday.

“This shows the deep and widespread support of the people for the Communist Party and the revolutionary movement,” the rebel spokesman for the region, Jorge Madlos, said in a statement to news agencies.

Madlos did not address the extortion allegations. The NPA has said businesses operating in its zones of influence must pay “revolutionary taxes” that help fund the insurgency.

Both sides declared unilateral Christmas ceasefires on December 16 that end on January 3 next year.

The government has said formal peace talks would begin in Norway in February, aimed at ending the insurgency within three years.

The NPA, the CPP’s armed wing, launched its uprising in 1969, and it is now one of Asia’s longest-running insurgencies.