Gains in Philippine Long Distance Telephone Co. (PLDT) limited the downside.
The composite index fell 7.29 points to 2,076.81 after trading between 2,071.43 and 2,084.59. Turnover was 978 million shares worth P879 million.
The all-shares index was up 1.25 points at 996.79.
Losers outnumbered gainers 57 to 28, with 54 stocks unchanged.
Dealers said that after news of the blast at the presidential palace, investors were additionally nervous given the upcoming 20th anniversary of the popular revolt that ended the 20-year rule of the late Ferdinand Marcos.
While some see the resulting losses as a buying opportunity, many failed to be convinced, with investors opting to stay on the sidelines.
An explosion rocked the Malacanang presidential palace grounds on Monday amid reports of failed recruitment attempts for a supposed coup attempt against President Arroyo, who survived a military mutiny in 2003.
There were no casualties or damage and the government ruled out explosives in the blast.
Early Tuesday government forces arrested one of five junior officers who escaped from military prison last month while on trial for the 2003 mutiny.
Police said two communist guerrillas were also arrested with the officer, suggesting the two groups are planning a tactical tie-up against Arroyo.
"Cautiousness ruled today’s session but from the low turnover, it appears that not everyone is selling. Most are holding on to their shares," said Harry Liu of Summit Securities.
Top-traded PLDT was up P10 to P1,755.
Ayala Corp. advanced P2.50 to P332.50 while unit Globe Telecom was up P5 to P825.
San Miguel A-shares, limited to Filipino investors, were down 50 centavos to P61. San Miguel B-shares, available to Filipino and foreign investors alike, fell P1 to P81.
SM Prime, the nation’s largest shopping mall operator, lost 20 centavos, or 2.5 percent, to P7.80, its first decline in three days. SM Investments, which controls SM Prime, fell P4, or 1.8 percent, to 213, its third day of decline.
San Miguel’s Class A shares, which are reserved for Filipinos, fell 50 centavos, or 0.8 percent, to P61. Its Class B shares, which have no ownership restrictions, fell P1, or 1.2 percent, to P81. – AFP