Philippines share prices closed 0.61 percent lower on Thursday, ending a two-day rally after further losses on Wall Street and a fresh spike in oil prices hit sentiment, dealers said.
They said the return to higher oil prices after the latest US oil stockpiles data was unwelcome given the possible impact on inflation and the risk the central bank could hike interest rates as a result.
The composite index fell 11.65 points to 1,903.09, off a high of 1,918.81. Turnover was 612 million shares worth 803.7 million pesos (14.36 million dollars).
The broader all-shares index retreated 5.79 points to 1,164.24.
Losers beat gainers 35 to 17, with 49 stocks unchanged.
The peso was at 55.96 to the dollar by midday.
"This is a correction after the technical rebound," said Jose Vistan of AB Capital Securities.
He said the market failed to sustain the gains of the past two days in the absence of fresh positive leads and after oil prices resumed their uptrend, prompring fresh concerns about the impact on the economy.
"Give me one good reason why the market should rise and I'll give you 10 reasons why it shouldn't," Vistan said.
Dealers said an expected tightening in monetary policy also dampened sentiment.
"Investors have turned short-term, given lingering concerns on oil. Politics also remains a disincentive to trade," said Ron Rodrigo of Accord Capital Equities, referring to efforts to oust President Gloria Arroyo.
Philippine Long Distance Telephone was the most active stock, falling 20 pesos to 1,540.
SM Prime Holdings declined 10 centavos to 7.10 pesos, while parent SM Investments was unchanged at 212 pesos. Manila Electric (Meralco) B, available to all investors, was down a peso to 20.50. Meralco A, limited to local buyers, was unchanged at 13.75 pesos. Ayala Corp eased 2.50 pesos to 295 while unit Ayala Land was flat at 7.70 pesos.
San Miguel B, open to all investors, was unchanged at 95 pesos, as was San Miguel A, limited to Filipino investors, at 65.50 pesos.