The fighters of the Bangsamoro Islamic Freedom Fighters (BIFF) seized the seven and then killed them in a series of raids in the island of Mindanao where Christian-Muslim conflicts have seethed for decades.
About 150 fighters of the BIFF launched assaults in different mainly-Christian towns before dawn, said Colonel Ricky Bunayog, the local military commander.
"They abducted farmers and then killed them. When we attempted to recover their bodies, they fired on us," he told AFP in the southern town of Tukuran, one of the the group's targets.
The attackers had since dispersed but the military was planning a "counter-action," Bunayog said, although he would not disclose details.
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In Manila, military spokesman Colonel Restituto Padilla said the guerrillas may have launched the attack "to make a statement," ahead of the Christian holiday of Christmas.
The Philippines is overwhelmingly Christian but has a Muslim minority that claims the south as their homeland.
It has opposed a peace process between the government and the MILF for the creation of a Muslim autonomous area in the south and has vowed to keep fighting for a separate Islamic state.
Last year, the BIFF uploaded clips on YouTube showing one of its leaders pledging support for the Islamic State organisation, the jihadist group that has seized a large swathe of territory in Iraq and Syria.