Iglesia Filipina Independiente (Aglipayan) worker Lorna Rivera Baba, 39, was the last of 14 people whom the military had accused of having conspired to kill Balweg, to be cleared of the crime.
In a two-page decision, Judge Corpuz Alzate said the evidence which prosecutors had presented was insufficient to prove Babas guilt beyond reasonable doubt.
The Abra-based Agustin Begnalen Command of the New Peoples Army (NPA) earlier had owned up to Balwegs murder and denied Babas participation in the killing.
The NPA unit said Balweg was meted "revolutionary justice" because of his alleged "crime against the people."
The military had alleged that Baba, 39, was an NPA member whose real name is Miel Laurenaria and known as "Ka Lisa."
Elements of the Intelligence Service of the Armed Forces of the Philippines (ISAFP) arrested Baba in Pidigan town on March 17, 2000. Baba claimed that her arrest was not covered by a warrant and that she was tortured and subjected to inhumane treatment by the military and the police.
She said she was brought to Camp Aguinaldo where she was presented to the media as a high-ranking official of the Northern Luzon Central Committee of the Communist Party of the Philippines (CPP) who had allegedly masterminded Balwegs killing.
Balweg, a former SVD priest, joined the New Peoples Army (NPA) in the late 70s when his fellow Tingguians embraced the armed revolution to resist the logging operations of Cellophil Resources Corp. in the mountains of Abra and Mt. Province.
He left the communist movement in 1986 to form his own paramilitary group, the Cordillera Peoples Liberation Army.