STOCKS declined on Thursday, with the index posting its worst day in more than two months, on concern the US is headed for recession after manufacturing dropped the most in five years and oil prices reached a record.

Philippine Long Distance Telephone Co., also known as PLDT, and Ayala Corp. led the nation’s biggest stocks lower on speculation a US decline will hamper global growth and stall the Philippine economy’s fastest expansion in three decades. The US is the biggest overseas market for Philippine products and labor.

“The US economy is in a fragile state,’’ said Paul Joseph Garcia, who helps manage $1.8 billion as chief investment officer at ING Investment Management in Manila. “Equities will be in for a rough ride.’’

Philex Mining Corp. advanced to a three-week high after gold prices climbed to a record on speculation oil prices will boost demand for the precious metal as a hedge against inflation.

The Philippine Stock Exchange index declined 115.91, or 3.2 percent, to 3,501.38 at the close, after sliding 1.4 percent in the previous two sessions. Thursday’s loss, the worst since October 22, erased about $3.27 billion in market value.

Only two stocks rose and three were unchanged in the 32-member benchmark, which fell as much as 3.3 percent earlier Thursday before closing at a six-day low.

PLDT, the nation’s biggest company by market value, dropped P90, or 2.9 percent, to 3,060, its biggest loss in more than two months. Ayala, the No. 2 by market value, tumbled P35, or 6.4 percent, to P510, its sharpest slide since February.

The US Institute for Supply Management’s manufacturing index dropped to 47.7 in December, the lowest since April 2003 and the first reading below 50 since January 2007. The drop sent stocks tumbling in the US, which buys a fifth of Philippine exports and is home to more than a third of Filipinos working and living abroad.

The Philippine government said last month that money sent home by overseas Filipinos helped the economy grow as much as 7.3 percent in 2007, the fastest annual pace since 1976.

Bank of the Philippine Islands, the nation’s largest lender by market value, lost P2.50, or 4.1 percent, to P58.50. Megaworld Corp., the second-largest builder, which makes about 20 percent of its home sales to overseas Filipinos, decreased 20 centavos, or 5.1 percent, to P3.75.

Philex, the largest Philippine metal producer, gained 10 centavos, or 1 percent, to P9.90, its highest close since December 6.

Gold gained to a record $860.10 an ounce Wednesday. Bullion for immediate delivery recently traded down 0.3 percent at $854.78 an ounce. Crude oil reached $100 a barrel Wednesday and was recently down 0.3 percent at $99.36 on the New York Mercantile Exchange.

Shares worth P2.43 billion were traded, 51-percent less than the six-month daily average. More than six stocks fell for each that gained in the broader market. 

BROADCASTING giant GMA Network Inc. has accused long-time rival ABS-CBN Broadcasting Corp. of false and malicious allegations of television ratings manipulation in a civil suit and is asking for P15 million in damages and fees.

San Miguel completes Boag sale

FOOD and beverage giant San Miguel Corp. (SMC) has completed the sale of its premium Tasmanian brewer J. Boag & Son to Lion Nathan Ltd.

SANTIAGO-Owned Philippine Telegraph and Telephone Corp. (PT&T) said a frequency test it ran through its network may have caused the signal interference problem experienced by Sun Cellular.

FILIPINO IT startups can coax further growth by partnering with global software companies, an IT industry executive said.

STOCKS declined on Thursday, with the index posting its worst day in more than two months, on concern the US is headed for recession after manufacturing dropped the most in five years and oil prices reached a record.