Philippines bow to Saudis, soften line on Muslim rebels

The need for Middle Eastern oil and the continued threat of a Libyan-backed insurgency are prodding Philippine President Ferdinand Marcos toward concessions to Muslim rebels in the country's south.

The President may be heeding calls from Saudi Arabia to negotiate a truce with the insurgents on the island of Mindanao. He may have a good reason for listening to Saudi Arabia: Economic ties to the oil-rich kingdom are crucial to the Philippines.

In the face of a deteriorating economy in the country, there seems little choice for Marcos but to soften his stand toward the rebels. Saudi Arabia supplies 40,000 barrels of oil per day, and the Philippines has requested an additional 10,000. Saudi Arabia also employs some 150,000 Filipinos. This may increase as unemployment rises in the Philippines.

During a recent visit to Saudi Arabia, the Philippine strong man got the Saudis' commitment on several economic proposals, including a $500 million loan. In return, Marcos made concessions on the conflict, which has claimed some 60, 000 lives since 1972.

At the heart of the issue is the so-called Tripoli agreement of 1976. At that time, the Philippines signed an agreement with the leading rebel group, the Moro National Liberation Front (MNLF), which is supported by Libyan ruler Muammar Qaddafi.

The document calls for the ''autonomy'' of the Mindanao region. But there has been continuing dispute over exactly what this means.

In 1979, President Marcos set up two semi-autonomous regions in Mindanao, claiming to have implemented the agreement. But Saudi Arabia and other members of the 42-nation Organization of the Islamic Conference (OIC) have expressed reservations. Diplomatic sources say Saudi Arabia and others were unhappy with Marcos' interpretation of autonomy for the 4 million Muslims living in the predominantly Christian region.

Diplomatic sources say Saudi Arabia brought up the matter of a ''Muslim region'' during Marcos' recent visit, and urged the creation of a single autonomous region.

Apparently as a concession to the Saudis, Marcos now says an election in Mindanao's two regions will be held on May 27. Later the two executive councils will merge, to ''implement the Tripoli agreement,'' Marcos said.

It is unclear just how far the government would have to go to satisfy the MNLF. In 1977, MNLF leader Nur Misuari said the rebels would drop their fight for ''autonomy'' and would press for the more radical ''self-rule.''

Little has been heard from Misuari since. But a Libyan diplomat told this correspondent that the Libyans still recognize Misuari as the sole leader of the MNLF.

Talks between Marcos and the rebel leader have never materialized. But Habib Chatti, secretary-general of the OIC, told Marcos that he received a letter from the MNLF saying that it still wants to make Mindanao ''a separate and independent state.''

Misuari no longer depends entirely on Middle East support. According to sources, he has succeeded in establishing ties with non-Arab states and may even have shifted his base to Asia, possibly to Vietnam.