Army spokesperson Capt. Patrick Ray Retumban, said a soldier was also injured in the fighting that broke out at around 1:30 p.m. on Thursday between government security forces and some 40 NPA guerrillas in a village in Mansalay town.
After a two-and-a-half-hour firefight, Retumban said the troops gained control of the rebel lair, recovered several firearms and explosive materials and the bodies of the three slain rebels.
He said troops recovered three M16 rifles, one AK-47 assault rifle, one cal.45 handgun with two magazines, one grenade launcher tube, two improvised explosive devices (IEDs) and other explosive materials at the encounter site.
The presence of the rebels in the area was tipped off by the villagers, Retumban said, prompting the troops to launch the offensive.
The NPA rebels, the armed wing of the Communist Party of the Philippines (CPP), continue to wage small-scale armed attacks against the military after the Duterte administration scrapped the talks with the armed group in 2017.
The armed group marked the 50th anniversary of their rural rebellion on March 29.
The CPP and their front organizations have been attempting to negotiate a peace pact with five Philippine presidents before the current leader, President Rodrigo Duterte, but negotiated settlement remains elusive and peace talks have repeatedly stalled.
Duterte, whose single and six-year term ends in June 2022, said in March that he has no more plans to reopen the talks during his term.