Philippines stocks closed at their lowest level in two weeks on Thursday after the peso plunged to record depths beyond 56 to the dollar as political uncertainty mounted ahead of elections on May 10.
Analysts said investors ignored news that the economy grew a better than expected 4.5 percent in the fourth quarter of 2003 from a year earlier as they became increasingly worried about fresh destabilisation moves against the government.
"The coup rumours hit the market. This and the effects from the Moody's downgrade further weakened the peso," said AB Capital economic analyst Jose Vistan.
On Wednesday, a group of young military officers denounced what they said was the government's attempt to use soldiers to influence the outcome of the election on May 10 and called for Defence Secretary Eduardo Ermita's resignation.
Ermita denied the accusations and said they could be part of fresh moves to destabilise the government after an attempted coup by about 300 elite soldiers last July.
General Narciso Abaya, the military's chief of staff, said six soldiers had been taken in for questioning but attributed the allegations to political dirty tricks.
"This is definitely election-related," he said.
Compounding the country's woes, Moody's Investors Service on Tuesday cut its long-term rating on the Philippines by one notch to Ba2, citing unstable politics ahead of the election in May and concerns over the government's debt and budget deficit levels.
The main stock index fell 2.18 percent or 33.82 points to 1,515.15 points, its lowest close since January 16.
Turnover dipped to 631.11 million pesos ($11.3 million) from Wednesday's 945.54 million pesos.
Philippine Long Distance Telephone Co, the country's largest telecommunications firm, fell 2.65 percent or 25 pesos to 920 pesos.
Second-ranked Globe Telecom Inc ended 2.65 percent or 25 pesos lower at 920 pesos.
San Miguel Corp, Southeast Asia's largest food and beverage firm, bucked the trend after Reuters reported on Wednesday that its 2003 net income grew 7.2 percent to 7.4 billion pesos, better than market expectations.
Company sources told Reuters that strong beer sales helped San Miguel's profits despite a poor showing by its food units.
San Miguel is due to hold an investor briefing on Thursday at 3 pm (0700 GMT).
San Miguel's B-shares, open to foreign investors, rose 2.16 percent or 1.50 pesos to 71 pesos. Its A-shares, restricted to Filipinos, gained 0.88 percent or 50 centavos to 57 pesos.