The communists have been waging a "national democratic revolution" since 1968 to overthrow a capitalist system that has created one of Asia's biggest rich-poor divides and claimed 30,000 lives, according to the military.
A new round of negotiations began in Rome on Thursday, with the government's chief negotiator Silvestre Bello saying longstanding contentious issues could be "hurdled".
"I am one with President (Rodrigo) Duterte's optimism that in this round of talks, we are able to finalise and approve the joint ceasefire agreement," Bello said at the opening of the talks.
Duterte, 71, said it was his "dream" to secure a lasting peace deal within his six-year term.
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After assuming office in June last year, the self-styled socialist launched the peace process and appointed three communists to his cabinet.
Both sides agreed to a temporary ceasefire during talks in Norway last August.
The government said then it was aiming for a final peace deal within 12 months.
However, the communists said this week they would need at least two more years after negotiators agreed on a series of economic and political reforms before even beginning "serious discussions" on a final peace pact.
Duterte last year released 18 top leaders to kickstart the peace process but had refused to free the rest, calling them his "aces" in a "poker game".
"The broken promises on the release of political prisoners have made the extension of the (communist) unilateral ceasefire untenable," Agcaoili said.
In the week-long talks in Rome, negotiators will discuss some of the toughest and most complicated issues involving political, economic and constitutional reforms at the heart of the communists' grievances.
Despite the obstacles, the communists understand their best chance for securing most of their goals is during the presidency of Duterte, who has pivoted his nation's foreign policy away from the United States towards China.