Panic selling gripped trading at the Philippine Stock Exchange (PSE) which suffered its worst single-day percentage decline ever on Monday as heightened fears of a global recession sent markets into convulsions.

The 30-company composite index lost 12.3 percent to 1,713.83, its lowest finish since September 20, 2004 when it settled at 1,702.21. It shed 239.66 points, second-largest, one-day point loss since 1990.

In late morning, the main index plummeted over 10 percent, forcing a 15-minute trading halt, a first in the market's entire history.

Turnover was relatively thin at 1.1 billion shares worth P1.6 billion ($32.2 million), with 123 issues in retreat, 13 unchanged and just five managing to survive the bloodbath.

The peso traded at an average of 49.312 to the dollar in the morning after the central bank intervened, flooding the market with an estimated $100 million, according to dealers. The local currency touched a 22-month low of 49.35.

Analysts said Wall Street's steep fall last Friday prompted investors to dump their holdings as soon as trading opened. This was aggravated by knee-jerk reactions to bad news from Banco de Oro (BDO), which reported a third-quarter net loss of P1.3 billion due to exposure to collapsed US investment bank Lehman Brothers.

"The problems are far from over. The economy is still not doing good. As expected, there is absence of confidence among investors so they're redeeming their holdings," April Lee Tan, research head at CitisecOnline said.

Astro del Castillo of First Grade Holdings told abs-cbnNEWS.com that investors were worried that more companies would report lower profits for the quarter as the week got off to a bad start.

Other analysts downplayed today's fall, saying there was just forced selling by funds needing to meet margin calls and redemption requests.

"Those funds that sold earlier are not buying yet. Others are saying that until they know how much of their funds will have to be paid up to investors, they cannot buy yet, they have to keep their money in cash," noted Joseph Roxas, president of Eagle Equities.

BDO plunged 24 percent to P22.50.

Top-traded Philippine Long Distance Telephone Co fell 14.2 percent to P1,850.00, tracking the decline in its American Depositary Receipts, which lost $2.80 last Friday.

Ayala Corp. dropped 11.9 percent to P200.00, and its Ayala Land arm lost 8.6 percent to P5.30, while Bank of the Philippine Islands ended 10 percent down to P36.00.

SM Prime Holdings gave up 9.7 percent to P6.50.

San Miguel A shed 2.3 percent to P42.00, while its B shares were 4.5 percent down to P42.00. -- with a report from LIZA REYES, ABS-CBN News