The main-share Philippine Stock Exchange index shed 88.17 points or 2 percent to finish at 4,219.82.
All counters faltered but the most battered were the mining/oil and property counters which fell by 3.5 percent each.
Risk aversion was high given the continuing turmoil in developed markets.
Turnover was thin at P3.8 billion.
There were only 39 advancers against 113 decliners while 32 stocks were unchanged.
Metrobank, ICTSI, PLDT, DMCI, AGI, ALI, SM Investments, SM Prime, Philex, BDO, San Miguel, AEV and Ayala Corp. led the index lower. Lepanto A (open only to local investors), RCBC, FLI, Lepanto B (open to foreign and local investors) and Boulevard likewise weakened.
This developed as Italy became the next developed country to suffer from a sovereign debt rating downgrade. Standard & Poor’s Ratings Services cut its debt grade by one notch on Monday, citing weaker economic growth prospects and high government indebtedness.
Overnight, the Dow Jones Industrial Index was down by 108.08 points or 0.94 percent to 11,401.01.