Tuesdays gunbattle between government troops and the New Peoples Army (NPA) in Sta. Ignacia town left at least 18 rebels dead.
The military considers Sta. Ignacia a stronghold of the NPAs Oscar Estrada Command.
The military said the rebels whose 37-year-old insurgency has claimed more than 40,000 lives by official count have long extorted "revolutionary taxes" from local farmers and businesses.
"We are searching targeted houses" based on local tip-offs, including mobile phone short messages," said Army Lt. Col. Gregory Cayetano, who is commanding the manhunt.
The soldiers searched caves in Burgos and villages around Santa Ignacia and the nearby town of Mayantoc, said Cayetano.
They recovered the bodies of 10 guerrillas, including a woman, from Tuesdays battle, he said.
The military was investigating whether the alleged leader of the guerrilla group, a woman identified as Janet Cruz, was among the dead, said Cayetano.
"We received intelligence reports that there are wounded rebels inside certain houses and are being guarded by their armed comrades," Cayetano said.
"It appears that they (the rebels) are planning to bring in doctors to treat their comrades once the military calls off the manhunt," he said.