Philippine stocks fell to a new one-month low on Thursday after a report the largest US pension fund may unload its equities investments in the country.
The California Employees Retirement System (Calpers) last month delayed divesting $67 million worth of Philippines stocks to review reforms that could make the Southeast Asian nation an attractive investment site.
But one newspaper reported on Thursday that Calpers' advisers found the reform measures lacking. Philippine diplomats in the United States will meet Calpers officials on March 15 to try to keep the country on the fund's investment list, it said.
"The news of Calpers added to worries. This could be more baggage for us," First Grade Holdings Managing Director Astro del Castillo said.
Analysts said investors also reacted to losses on Wall Street amid a lack of strong company and economic leads.
The main index fell 1.42 percent or 20.60 points to 1,435.07 points, erasing its gains for the year to stand 0.51 percent lower since the end of 2003. Analysts said the index may fall below the 1,400-point level if Calpers confirms its withdrawal from the Philippines, a move other foreign investors might follow given mounting uncertainty over who will be elected president in elections on May 10.
Polls show a close race between President Gloria Macapagal Arroyo and movie star Fernando Poe Jr. Filipinos will also vote for 17,000 other posts at all levels of government. Philippine Long Distance Telephone Co (PLDT), the nation's largest phone firm, led the decline by losing 3.19 percent or 30 pesos to 910 pesos. Analysts said players tracked Wednesday's 2.96 percent drop in PLDT's American Depository Receipts to $16.05.
Ayala Corp - the country's largest conglomerate with interests in property, banking and telecommunications - fell 4.92 percent or 30 centavos to 5.80 pesos.
San Miguel Corp shares were steady on news Southeast Asia's largest food and beverage firm was setting up its first factory in Thailand, which will make and distribute all of its products.
San Miguel B-shares, which are open to foreigners, were unchanged at 68.50 pesos and the A-shares, restricted to Filipinos, were flat at 56.50 pesos.
Turnover rose to 789.74 million pesos ($14.05 million) from Wednesday's 412.2 million pesos. Decliners beat gainers 34 to 11 and there were 43 stocks unchanged.