Philippines share prices closed 0.76 percent lower on Monday, slipping back after sharp gains on Friday on concerns the central bank may raise key interest rates later this week, dealers said.
They said rising oil prices and a weaker peso may prod the central bank to lift rates, ahead of another potential rise in US interest rates later next month.
The composite index shed 17.50 points to 22,282.89 after moving between 2,278.85 and 2,310.19. Volume reached 723.17 million shares worth 1.02 billion pesos (9.31 million dollars). Losers outnumbered gainers 39 to 34, with 43 stocks closing flat.
The broader all-shares index fell 7.54 points to 1,429.87.
The Philippine peso traded at 52.828 to the US dollar as of mid-day.
"Last Friday's recovery was just a technical bounce, which cannot be sustained as concerns over rising interest rates remain," said Nestor Aguila of DA Market Securities.
AB Capital Securities said, in a note to clients, the Philippine central bank, may increase its benchmark overnight rates at its policy meeting on Thursday, after keeping them steady for seven straight months. Property firms fell on worries that higher interest rates would dampen real estate sales.
Ayala Land Inc fell 25 centavos to 12.50 pesos while Megaworld Corp shed two centavos to 1.54 pesos. Banks also retreated on concerns higher rates may ease demand for loans. Bank of the Philippine Islands was down 50 centavos at 52 pesos while rival Metropolitan Bank and Trust Co declined one peso to 36 pesos. Bucking the downtrend, mining counters continued to shine after metal prices rose in US trading Friday following sharp losses earlier in the week.
"There is a school of thought that metals will continue to be a good hedge against inflation and many investors believe that," said Aguila.
Philex Mining's A-shares, which are restricted to Filipinos, rose 10 centavos to close at 3.85 pesos while its B-shares, which foreigners can buy, advanced 15 centavos to 3.90 pesos.
Food and beverage giant San Miguel Corp's A-shares gained 50 pesos to 64 pesos while its B-shares fell four pesos to 72 pesos.
Heavyweight Philippine Long Distance Telephone Co (PLDT) was unchanged at 2,010 pesos.