MANILA, Philippines -- Regulators, local financial services companies and investors braced for the whiplash of massive troubles coming from the US economy, as local financial markets continued their free fall on day two of what is fast becoming known as the worst crisis in Wall Street since the Great Depression.

Both the peso and local equities were unable to shield themselves from the global fiasco. The peso tumbled to a 16-month low of 47.295 to the US dollar Tuesday morning amid a fallout from the collapse of US investment banking giant Lehman Brothers and the fragile health of Merrill Lynch and insurance giant American International Group.

Share prices closed 4.5 percent lower , as the composite index lost 114.44 points to 2,421.72. Tuesday's close was the index's lowest since July 23, 2008 when it finished at 2,462.94 and it was the sharpest one-day fall on the local equities market since January 22 when it plunged 173.89 points, or 5.5 percent on fears of a US recession.

President Gloria Macapagal-Arroyo and her economic managers will hold a mid-year briefing this Wednesday where they are expected to announce measures to ease the impact of the US financial crisis.

Two senators have also asked pension funds Government Service Insurance System (GSIS) and Social Security System (SSS) to disclose their exposure to troubled US firms Lehman Brothers, Merrill Lynch and AIG. Such an exposure could wreak havoc on retirement and pension funds of both public and private employees.

Opposition Senator Loren Legarda noted that in September last year, GSIS claimed that it would stash up to $1 billion overseas under its global investment program.

?The Government Service Insurance System and the Social Security System should also instantly disclose and resolve any direct or indirect exposure they might have in Lehman, or in American International Group Inc. (AIG), which is also in financial distress for the same reasons as Lehman,? she said in a statement.

Senator Francis Escudero, chairman of the Senate committee on ways and means, agreed, saying the GSIS should confirm if it has indeed invested in Lehman.

?Well, magandang malaman yan kung nag-invest nga dahil $4 billion with investible funds ang hawak ng GSIS at kinabukasan yan din ng GSIS employees [it will be nice to know if GSIS will disclose what it has done with its $4 billion in investible funds because that money is the future of GSIS employees],? he told reporters.

Lehman, Merrill and AIG are three of the biggest names in Wall Street and their woes have spilled over to all financial markets across the globe and could change the international financial architecture.

The bloodbath was mirrored in stock and currency markets across Asia . Hong Kong opened off 6.5 percent and Tokyo was down more than 5.0 percent, as trading screens across the region went red on the heels of the biggest one-day point loss on the US markets since the September 11 terror attacks.

"Generally this is sentiment spilling over from the severity of the impact of Lehman's bankruptcy on the US financial sector. The outlook still remains uncertain," Ron Rodrigo, head of research at DBP Daiwa Securities said.

The all-shares index lost 56.2 points or 3.5 percent to 1,538.82 with 107 issues down compared to 13 advancers and 22 unchanged, while turnover reached 1.73 billion shares worth P2.43 billion ($51.3 million).

Traders said the central bank intervened, selling some $100 million to stem the peso's decline.

"Everything is very fluid right now," Oliver Plana of Asiasec Equities told Dow Jones Newswires.

"We have yet to know the extent of what transpired in the United States," he said. "Cautious is an apt word to describe equity investors right now."

Credit Suisse analyst Gilbert Lopez said "the ongoing global financial market turmoil in our view would lead to weakness in the Philippine market over the near term."

Other analysts, however, said Philippine corporations should not be severely affected by the US sub-prime crisis.

"Banks here are not overleveraged [dependent on debt] like US banks. In fact, banks here have too much cash. But sentiment (on the stock market) will definitely be affected," April Tan, head of research at CitsecOnline.com said.

Banco de Oro led the local decline after the country's second-largest lender in asset terms said it was setting aside P3.8 billion to cover possible losses from its exposure to the collapsed US investment bank.

Banco De Oro shares fell 15.4 percent to P33.

Philippine Long Distance Telephone declined 3.7 percent to P2,500.

Metropolitan Bank fell 10.8 percent to P33, while Bank of the Philippine Islands ended 3.5 percent lower at P41.50.

Central bank governor Amando Tetangco said Tuesday some domestic banks have limited exposure to structured Lehman Brothers products.

San Miguel A-shares dropped 3.0 percent to P47, while its B-shares ended 5.2 percent down to P46.