MANILA, Philippines -- Foreign investment in Philippine stocks fell by $1.36 billion or 19 percent in 2007, with the biggest drop in the last two months of the year, the Philippine Stock Exchange said Thursday.

In November and December alone, some 16.69 billion worth of shares were sold by foreign investors -- the largest amount in a two-month period ever recorded by the exchange.

"The selling frenzy among foreigners did not stop in December as it only worsened in January, when stock prices retreated by 10 percent," the exchange said in a statement.

"If the trend in January continues, we will lose in just six months all the net foreign buying we piled up last year," warned Francis Lim, the president of the exchange.

"Our market's shaky start this year does not reflect its lack of fundamentals, because worries from overseas have been inducing its retreat," he said in the statement.

"But, while our macro-economic fundamentals remain intact, they need reinforcement so it can withstand shocks from abroad and regain strength," he said.

He urged the legislature to pass bills that would encourage more people to invest in the stock market and encourage more companies to list.

The Philippine economy grew by 7.3 percent last year, its best performance in 31 years.

But fears of a possible recession in the United States, the country's main trading partner, have been weighing down the stock market in recent weeks.