About 50 MILF guerrillas have set up a "detachment" in their own village of Pulonuling near the town of Tupi, MILF spokesman Eid Kabalu said.
"We might take out the firearms," Kabalu said. "The complaints were about the display and we are looking into that."
He said the complaint was lodged by the international monitoring team mainly composed of soldiers from Malaysia, which has also been hosting peace talks between the government and the MILF.
"Its a detachment within a residential community," Kabalu said, adding that the MILF gunmen there are also residents of the village.
A joint ceasefire monitoring committee is investigating a government complaint that the detachment violated the terms of the May 2002 ceasefire.
Earlier, South Cotabato Gov. Daisy Avance Fuentes also complained about the presence of the MILF camp in her province.
The government and the MILF are scheduled to resume peace talks later this month in Malaysia.
The administration of President Arroyo expects to sign a peace agreement in 2006 that would end the decades-old separatist insurgency and bring in much-needed investments and official development assistance from abroad to Mindanao, home to a large but impoverished Muslim minority. Lino de la Cruz, AFP