Army Brig. Gen. Raymundo Ferrer said Otong Halipa Lintungan, alias Commander Putol, was killed while four of his followers managed to escape during the encounter.
The one-armed Lintungan was wanted for past kidnappings and was in a hideout when troops sighted his group, Ferrer said.
Elsewhere, an Army trooper was killed while four others were wounded in a clash with a group of Abu Sayyaf bandits in Sulu.
The encounter came as the military sent the 2nd Scout Ranger Battalion last Monday to beef up government forces pursuing the group of Abu Sayyaf chieftain Khadaffy Janjalani and the Jemaah Islamiyah (JI) militants Dulmatin and Umar Patek.
Southern Command spokesman and Civil Relations Group chief Lt. Col. Susthenes Valcorza said the encounter occurred in Danag, Patikul on Tuesday.
Valcorza said the newly deployed Scout Ranger troops attacked a position of the Abu Sayyaf in the area, triggering a fierce running gunbattle.
It was not immediately known how many of the terrorists were killed but ground forces confirmed the bandit group suffered casualties, Valcorza reported. "Firefight has been ongoing," he said. — With AP, AFP