MANILA, Philippines - Soldiers shot dead a candidate for councilor in Padre Burgos, Quezon province Tuesday night in a firefight with a known New People's Army guerilla.

A military report said candidate Rolando Hontiveros was meeting with NPA rebel Gilberto Esguerra when elements of the Philippine Army's 76th Infantry Batallion arrived at the latter's house in Kinagunan village.

Esguerra, also known as Ka Ipe, fired at the soldiers, prompting them to fire back. Both Esguerra and Hontiveros were killed in the firefight, which lasted about 5 minutes.

The military said Esguerra was an escapee from the Quezon Provincial Jail and was a known collector of permit-to-campaign fees for the NPA in Quezon's 3rd and 4th districts. They said Hontiveros was negotiating with Esguerra on the permit when the shooting started.

Last Thursday NPA rebels shot dead a retired police officer running for municipal officer of Camarines Sur after he refused to pay the rebels' permit-to-campaign fee.

Col. Daniel Lucero, Philippine Army civil military operations chief, earlier said the NPA is set to rake in billions of pesos from extortion this year, boosted by protection money forked out by politicians contesting the May elections. A military spokesman added that said the rebels are demanding as much as P5,000 to P20 million from various candidates, from municipal councilor to president.