"Aided by the principled and properly guided implementation of Martial Law, the collapse of the terrorists support infrastructure is assured", Defense Secretary Delfin Lorenzana said in a statement.
"The communist rebels also denounced the intensified offensives by state forces against leftist fighters amid the military rule, adding that sustained aerial bombardments in Marawi "(have) been proven a failure".
The attack prompted Duterte to issue Proclamation 216 declaring martial law and suspending the writ of habeas corpus in Mindanao.
The SWS findings also followed a Supreme Court (SC) decision released on Tuesday, which affirmed the constitutionality of Duterte's martial law declaration as it threw out a consolidated petition filed by opposition lawmakers questioning its validity.
Alvarez said he is ready to marshal his fellow legislators for the objective of extending martial law "in order to give this administration enough time to resolve the problem of terrorism in Mindanao".
While generally expressing support for government efforts to defeat the terrorists, critics of Duterte's martial law declaration said that besides the potential for human rights abuses, the measure could have a chilling effect on foreign investment and tourism in the Philippines.
House Speaker Pantaleon Alvarez made a surprise move this week when he announced that he personally wanted to extend martial law in 2022 or until Philippine President Rodrigo Duterte steps down from his role as president.
Both the Armed Forces of the Philippines (AFP) and Philippine National Police chiefs already said they would likely recommend the extension of martial law given the continuing conflict in Marawi.
As this develops, Lorenzana said the government is now making plans needed for the the reconstruction of war-torn Marawi City.
Mindanao under martial law will turn on its 60th day on July 22. Martial law, even if warranted, even if there is factual basis for it, is never good for the country...
Displaced children stay at an evacuation center outside the city, as army troops continue their assault against insurgents from the Maute group, in Marawi, Philippines July 4, 2017. In a daily briefing on July 10, the military reported that more than 450 terrorists, 39 civilians, and 89 military and police personnel have been killed in the siege, which shows no sign of abating despite military claims that the militants have been confined to a small area and reduced to less than 100 fighters.
Meanwhile, 1,722 civilians who were held hostage or trapped in the main battle were either rescued or brought out of harms way.