However, continuing rumors of new plots to overthrow President Arroyo kept some investors worried, they said.
The composite index rose 3.86 points to 2,103.37 after trading between 2,095.78 and 2,105.49.
Volume reached 3.5 billion shares worth P786.1 million. Gainers marginally outnumbered decliners 40 to 39, while 53 stocks ended unchanged.
The all-shares index advanced 5.93 points to 986.92.
The market was cheered by the government’s announcement of a P146.5 billion 2005 budget deficit, well below the official target ceiling of P180 billion, thanks to higher revenues and lower expenditures.
"A lower government budget deficit means interest rates would likely be more stable, since there will be less pressure for the government to tap the debt market. This should help stimulate economic activity," said Jonathan Ravelas of Banco de Oro Universal Bank.
"There are some jitters in the market caused by the military’s admission that there is a threat against the government, and this has prevented the index from staging a rebound," said Jose Vistan of AB Capital Securities.
Philippine Long Distance Telephone Co. (PLDT) gained P5 at P1,750, recovering from recent falls.
Metropolitan Bank and Trust was down 50 centavos at P29.50.
San Miguel A shares were steady at P64 and San Miguel B-shares were unchanged at P88.
Bank of the Philippine Islands (BPI), the nation’s second biggest lender by assets, rose P1, or 1.7 percent, to P58.50.
"The company can continue paying more dividends while possibly doing more acquisitions’’ said Alfred Dy, head of research at CLSA Philippines Inc. in Manila. "It has a definite program of selling non-performing assets. It has sound fundamentals and exciting prospects.’’
Parent Ayala Corp. rose P5, or 1.5 percent, to P330.
SM Investments Corp. dropped P6, or 2.5 percent, to P233, its lowest since Oct. 28. Its fourth-quarter earnings may have been affected by increased competition from bazaars and seasonal retailers with low overheads, said Oliver Plana, an analyst at Asiasec Equities Inc. in Manila.
"We understand fourth-quarter sales were not as strong as expected,’’ Plana said.
Philippine companies are scheduled to report fourth-quarter earnings by mid-February.
In the overall market, trading totaled P786.1 million, about three-quarters of the daily average over the past six months. – AFP