MANILA - Philippine share prices closed 0.73 percent higher Monday as signs of easing inflation fuelled investor hopes that the Bangko Sentral ng Pilipinas (BSP) would trim its key interest rates further this week, dealers said.

The composite index added 17.76 points to 2,449.10, while the all shares index rose 8.87 points or 0.57 percent to 1,568.82.

Sixty issues advanced, 25 declined and 53 others ended unchanged.

A total of 831.62 million shares worth P2.51 billion ($52.19 million) changed hands.

The peso traded at 48.133 to the dollar in the morning.

"The market is looking forward to another rate cut," Ron Rodrigo of DBP-Daiwa Securities told Dow Jones Newswires.

"If inflation tomorrow sustains the upbeat mood, expect more gains," he added.

The government is to release June inflation data on Tuesday, while the BSP's monetary board is to announce its action on policy rates on Thursday.

The BSP last cut rates 25 basis-points in May to leave its overnight borrowing rate at 4.25 percent and the overnight lending rate at 6.25 percent, both 17-year lows. The moves came as Manila hoped to boost the economy, which grew just 0.4 percent in the first quarter.

Dealers said the key index looks headed for the 2,500-point levels, with support at 2,430.

Philex Mining added 4.22 percent to P7.40, while Manila Electric Co. (Meralco) rose 5.52 percent to P153.

Philippine Long Distance Telephone fell 1.05 percent to P2,365.