Profit-taking in property firm Megaworld Corp. also weighed on the market, but the key index stayed above the psychological support level of 2,300 throughout the session, they said.
The Philippine Stock Exchange composite index closed down 0.48 points to 2,314.09 after moving between 2,301.46 and 2,319.87.
Volume amounted to 2.15 billion shares worth P1.41 billion. Losers beat gainers 48 to 36, with 56 stocks unchanged.
The broader all-shares index fell 2.62 points to 1,433.24.
Analysts also noted that the key stock index closed at a three-week low after a US home sales report heightened concern that higher borrowing costs are stifling demand in the nation’s biggest export market.
A slump in overseas sales, which contribute some two-fifths of the Philippines’ gross domestic product, would hurt the local economy, said Joey Roxas, president of Eagle Equities Inc.
"It’s a reaction to housing sales in America," Roxas said. ‘It looks like the Fed overdid it."
"The market is still consolidating with a downward bias. Support seems to be very strong at above 2,300 points," said Nestor Aguila of DA Market Securities.
He said the market has managed to hold above that level because of the country’s sound economic fundamentals, highlighted by an improving fiscal outlook that may eventually lead to credit rating upgrades.
ING Bank said in a research note that with Manila’s favorable fundamentals, it sees "a 70-percent probability of at least an outlook upgrade by the first quarter of 2007" for the Philippines.
PLDT, the most actively traded stock, was down P5 at P1,945. It hit a four-week low of P1,930 early in the session, tracking further losses in its New York-traded ADRs which fell $0.13 to 37.61 overnight.
Banco de Oro rose P2 to P35.50 on renewed speculation that a merger with Equitable PCI Bank may finally take place. Equitable PCI was steady at P79.50.
"Without thinking of price it’s a very good fit for them," said Edgar Bancod, head of research at ATR-Kim Eng Securities Inc. "It provides them with a footprint in every major aspect of the business. All of a sudden they’re in the big leagues."
Megaworld fell two centavos to P1.70 hit by profit-taking following recent gains driven by upbeat earnings forecasts from analysts.
Food and beverage giant San Miguel Corp.’s A-shares fell one peso to P63 while its B-shares retreated 50 centavos to P72. – AFP