Two members of the extremist Abu Sayyaf group were also killed in the fighting against soldiers and pro-government volunteers in the strife-torn southern island of Basilan, the statement said.
The troops were guarding a town's water system following a series of extortion demands by Abu Sayyaf when they were attacked by about 20 gunmen.
"A fire fight ensued for five minutes (and) resulted in the death of (one civilian auxiliary) who was eventually beheaded," the report said.
Abu Sayyaf, set up with seed funding from Al-Qaeda in the early 1990s, has been blamed for many of the deadliest militant attacks in the Philippines, including the 2004 firebombing of a ferry on Manila Bay that claimed more than 100 lives.
The group has been known to behead some of its hostages and mutilate slain opponents.
It has engaged in mass kidnappings and extortion to raise funds and has proved resilient despite the Philippine military receiving US training to hunt them down.
