Manila - Philippine stocks continued to freefall on Thursday, after a slight recovery a day earlier, with the main index plunging 4.25 per cent.

The Philippine Stock Exchange's 30-share composite index lost 104.63 points to close at 2,352.37 from Wednesday's finish of 2,457.00.

A total of 1.81 billion shares worth 2.15 billion pesos (45.74 million dollars) were traded.

Losers swamped gainers 117 to 14, with 23 issues unchanged.

The market briefly recovered Wednesday after dropping by more than 8 per cent during the previous two trading days.

But the selloff continued amid disclosures by at least three Philippine banks they have investments with bankrupt US investment firm Lehman Brothers.

The three Philippine banks said they have set aside a total of 114 million dollars as buffer funds for possible losses due to Lehman's collapse.

"It's still a whiplash of the sub-prime crisis," said Astro del Castillo, managing director of First Grade Holding Inc. "Uncertainty is still up in the air, so investors are playing it safe." (dpa)