''It's encouraging to know that he is still alive,'' said regional analyst Professor Damien Kingsbury of Deakin University on Thursday.

''It's very positive that [the kidnappers] have shown a video and I think that means there is some seriousness to a discussion about a negotiation for his release. I would say his chances are probably slightly better than even at the moment.''

Neil Fergus, a former Australian intelligence officer who now runs private company Intelligent Risks, also saw the video as ''some cause for optimism'', although not necessarily proof a deal was near.

Rodwell's family members in Australia were keeping quiet on Thursday and Foreign Minister Bob Carr would only say Canberra was ''assisting Philippines authorities where appropriate'' and that it was in ''regular communication'' with the family.

However, there is mounting criticism that the federal government is being too cautious in its public pronouncements.

Australian policy is not to pay ransom money, the primary source of income for the militant Islamic Abu Sayyaf group, which snatched Rodwell from his home in the seaside town of Ipil on December 5 last year.

But Fergus said the government should send a message to Rodwell's kidnappers about Australia's aid dollars in the region.

''It would be helpful if the Australian government could convey some messages about the nature and extent of Australian aid going into Mindanao and the fact that their continued holding of Rodwell may place in jeopardy those programs,'' Fergus told Fairfax Media.

''Abu Sayyaf should know … that we do care about Mr Rodwell as an Australian citizen.''

An independent researcher on counter-insurgency in the Southern Philippines, Bob East, also says more publicity would boost Rodwell's chances of survival.

''If the coverage goes quiet, whichever group that has him might think he's not worth anything to them,'' East said.

Rodwell, 54, a former soldier who has spent many years in Asia, was snatched by half a dozen gunmen posing as policemen and is reported to have been taken to Basilan Island, off the Zamboanga Peninsula.

The kidnappers have demanded a $2 million ransom.

At the time of his capture he had reportedly recently separated from his second wife, a 28-year old Filipina, Miraflor Gutang.

The new two-minute video appears to have been shot on December 16, and shows him clutching a copy of a local newspaper dated the previous day. Looking gaunt and sounding tired and in poor spirits, he says he has been in captivity for 378 days, that ''something is happening but I don't know when'' and he holds ''no hope at all for being released.''

''I do not trust the Abu Sayyaf, I do not trust the Australian government,'' he said. ''I just don't trust anyone. Personally, I don't care.''

His open criticism of Abu Sayyaf has led some observers to speculate that he might have been sold to another group.

Counter-terrorism expert Professor Clive Williams, of Macquarie University, said the mountainous terrain of Basilan was notoriously difficult for the Philippine army to penetrate and that many of its villagers were loyal to Abu Sayyaf.

''I think it's only going to be resolved through negotiation,'' Williams said.

''Realistically there is not a lot of prospect of a rescue operation.''

Last year a Senate inquiry recommended eight options for how the government should handle such kidnappings, including the option that DFAT inform the family about ''engaging a private kidnap and ransom consultant''.

''One of the most compelling messages coming out of this inquiry was the importance of government agencies, especially DFAT, exercising greater care, consideration and diligence in the way they deal with the distressed families of a person kidnapped and held for ransom overseas,'' the committee reported.

Over the past decade 19 Australians have been kidnapped, mostly from Africa and the Middle East.

Rodwell is the only Australian kidnapped in the Philippines.

with Al Jacinto in Zamboanga