Army Sgt. Jeremias Rosete and three civilians were kidnapped by New Peoples Army (NPA) guerrillas in the southern province of Sultan Kudarat in 2001.
In a statement, Manilas peace negotiating panel said they learned recently that the hostages were killed by their captors the following year.
It said this fact was kept from the government by the NPAs political wing, the National Democratic Front (NDF), during peace talks last year.
Government negotiators in a meeting with their NDF counterparts in Oslo in 2004 were assured that the rebels were working on the release of the hostages.
"We deplore the CPPs disregard for life and its utter lack of humanity in withholding information from the relatives of Sergeant Rosete et al and the (government) about what they had done to their captives," the peace panel said.
The killings have effectively set back "the confidence building process" that both sides were trying to build in a bid to resume stalled peace negotiations.
The communists suspended talks with the government last year, accusing Manila of not doing enough to have the CPP-NPA delisted from the US governments list of terrorist organizations.
The CPP has been waging a Maoist rebellion to oust the government since 1969, making it among the worlds longest running communist insurgencies. AFP