Philippines shares closed lower on Friday, dragged down by losses in Philippine Long Distance Telephone Co. (PLDT) and property stocks, as investors remained cautious over economic concerns in the US, analysts said.

They added that surging oil prices also kept investors from taking aggressive positions.

On Thursday, US stocks rose slightly higher after Standard & Poor's predicted that losses from the mortgage and credit crisis might be bottoming out. But it now estimates writedowns of subprime asset-backed securities to reach $285 billion globally, up from its earlier projection of $265 billion.

At home, the composite index fell 33.94 points or 1.15 percent to 2,906.53.

The broader all-share index lost 12.47 points or 0.7 percent at 1,784.44.

Gainers beat losers, 46 to 34, while 53 stocks were unchanged.

A total of 842.09 million shares worth P1.8 billion were traded.

"The US market remains volatile and investors continue to worry about the weakness of the US economy. Some even doubt the sustainability of the Fed's $200-billion injection in to the banking system," said Harry Liu, president of Summit Securities.

"On the side are high oil prices and high inflation, which could mean that company earnings might be lower this year."

The central bank has left its headline interest rates unchanged at 5.0 percent for the overnight borrowing and 7.0 percent for the overnight lending due to high inflation in the first two months of 2008. Annual inflation accelerated to 4.9 percent in January and 5.4 percent in February, the fastest since October 2006.

Singapore-based DBS Bank raised its full-year inflation forecast for the Philippines from 3.5 percent to 5.0 percent, the upper end of the central bank's target range.

PLDT, the most heavily weighted stock, plunged P115 or 4 percent to P2,730.

Ayala Land, the country's largest property developer, dropped P0.30 or 3 percent to P9.70.

Megaworld Corp. edged down P0.08 or 3.5 percent to P2.18.

Robinsons Land Corp. retreated P0.50 or 4.7 percent to P10.25.