They said concerns over a possible interest rate increase to head off inflation pressures and doubts about the implementation of a new expanded value-added tax (VAT) muted the rally.
The Philippine Stock Exchange composite index rose 6.71 points to 1,909.80 after trading between 1,903.09 and 1,914.15. Volume was 741 million shares worth P1.67 billion, boosted by several cross and block sales.
The all-shares index gained 2.22 points to 1,166.46.
"The rally seems to be capped... it could be in anticipation of a central bank rate increase," said Jonathan Ravelas of Banco de Oro Universal Bank.
The central bank has indicated that a tightening in monetary policy is likely in the near term after inflation rose faster than expected in August.
Additionally, the market has been unsettled by uncertainty over the implementation of the VAT law that was recently upheld as constitutional by the Supreme Court, said Astro del Castillo of First Grade Holdings.
"Investors are in a wait-and-see (mode). They want to see the expanded VAT implemented," del Castillo said, referring to efforts by various opposition to delay a law the government argues it is needed to avoid a fiscal crisis.
Philippine Long Distance Telephone Co. (PLDT) lost P5 to P1,535 but Globe Telecom rose P20 at P760, largely in block trades.
Metropolitan Bank Trust Co. gained P1.50 to P27.
Bank of the Philippine Islands (BPI) fell 50 centavos to P51 while parent Ayala Corp gained five pesos to P300. Ayala Land was steady at P7.70.
Manila Electric B shares, open to foreign investors, was down 50 centavos at P20 while Manila Electric A shares, exclusive for local investors, retreated 25 centavos to P13.50.
San Miguel Corp. B shares gained 50 centavos to P95.50 while San Miguel Corp. A shares fell 50 centavos to P65.
PCCI Securities President Francisco Liboro said concern over efforts to water down the expanded value-added tax law – the centerpiece of the government’s fiscal reform program – have kept sellers from exiting the market.
A congressional ally of President Arroyo has filed a resolution seeking to defer the implementation of VAT on oil and energy products until June next year due to rising oil prices.
The Supreme Court on Sept. 1 upheld the legality of the expanded VAT law, but didn’t lift the suspension it imposed on the measure in July to give the opposition a chance to challenge the ruling. Opposing parties have until Friday to file a motion. – AFP