MANILA Philippines AP Philippine stocks plunged Tuesday as investors cashed in on recent gains following Wall Street's large drop overnight traders said. The 30-share Philippine Stock Exchange Index fell 53.57 points or 2.7 percent to 1921.79 nearly erasing Friday's 54.43-point or 2.8 percent gain. The market was closed Monday for a national holiday. Traders said the market joined other regional bourses hard hit by the Dow Jones Industrial Average's 2.3 percent decline Monday. San Miguel B shares fell 4 pesos or 5.8 percent to 65 pesos following a news report claiming that Filipino-Chinese tycoon Lucio Tan has revived his bid to acquire the 20 percent stake held by San Miguel chairman Eduardo Cojuangco Jr. Fitzgerald Aklan assistant vice president for institutional sales of Orion-Squire Securities Inc. said the prospect of Tan taking control of San Miguel the Philippines' largest food and beverage conglomerate may not have been welcomed by investors. Tan owns Asia Brewery Inc. the main beer rival of San Miguel. He is also chairman of ailing Philippine Airlines Inc. and is embroiled in a 26 billion peso dlrs 658 million tax evasion case. Investors shrugged off a cut in the central bank's key overnight rates and gains by the peso against the dollar Tuesday traders said. The central bank cut its overnight borrowing rate to 13.375 percent from 13.500 percent and its overnight lending rate to 15.375 percent from 15.500 percent. The overnight rates influence the direction of other interest rates. Lower rates may cause a shift in funds from fixed-income bonds to other types of investments such as stocks. ``The correction was bound to happen since the market has been strong in the past few days'' said Aklan. ``The correction may continue in the next session or two but the market is bound to move up soon after and remain strong toward the end of the year.'' Aklan said the index remained fairly buoyant Tuesday despite the presence of profit-takers. He noted that any downturn in prices was soon met with bargain-hunting especially among second-tier stocks. In currency trading the peso strengthened against the U.S. dollar as strong dollar inflows overpowered the impact of the interest rate cuts traders said. The dollar averaged 39.342 pesos for the day down from Friday's 39.512 pesos. It traded in a thin range of 39.290 pesos to 39.400 pesos and last changed hands at 39.355 pesos. Traders said most of the dollar inflows were remittances from Filipinos working overseas. An estimated 4.5 million Filipinos work abroad sending home at least dlrs 6 billion last year. Their foreign-exchange remittances provide an important contribution to the Philippine economy and are expected to help support the peso over the rest of the year. APW19981201.0674.txt.body.html APW19981201.0726.txt.body.html