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.

Manila - Two top Philippine banks have set aside 94.7 million dollars in provisional funds to cover possible losses arising from the collapse of the US investment bank Lehman Brothers Holdings Inc.

Both the Metropolitan Bank and Trust Co (Metrobank) and Banco de Oro have exposure in Lehman Brothers.

The central bank also offered emergency lending to banks that might need funds but stressed that it was not worried because it believed Philippine banks could weather the crisis after implementing reforms after the 1997 Asian financial crisis.

Central bank Deputy Governor Diwa Gunigundo on Wednesday urged depositors not to panic.

Cotabato City, Philippines - A United Nations official on Wednesday expressed alarm over the growing number of people displaced by fighting between the military and Muslim separatist rebels in the southern Philippines.

Stephen Anderson, country director for the World Food Programme (WFP), visited evacuation centers in Maguindanao province, 960 kilometres south of Manila, one of the areas affected by the military's offensive against Moro Islamic Liberation Front (MILF).

Anderson said the WFP has so far dispatched some 1,700 metric tons of rice for distribution to 400,000 people displaced by the hostilities since August.

But he noted that more assistance was needed as the number of evacuees was continuing to rise.

Manila - Four communist rebels were killed in separate clashes with government troops in the southern Philippines, a military report said Wednesday.

Three communist rebels were killed in a running gunbattle with soldiers in Columbio town in Sultan Kudarat province, 960 kilometres south of Manila.

Another communist guerrilla was also killed in a clash with government security forces in San Miguel town in Surigao del Sur province, 810 kilometres south of Manila.

Manila - Philippine President Gloria Macapagal Arroyo will push ahead with a trip to the United States she cancelled earlier due to escalating violence in the country's troubled south, her press secretary said Wednesday.

According to Press Secretary Jesus Dureza, Arroyo decided to proceed with the visit to New York to attend the 63rd United Nations General Assembly and other meetings with global leaders.

Manila - The European Union (EU) on Tuesday called for an early resumption of stalled peace talks between the Philippine government and Muslim separatist rebels, as it expressed alarm over escalating violence in the country's troubled south.

The EU also urged the government and the Moro Islamic Liberation Front (MILF) to "show restraint and genuine respect for the rule of law" to avoid further inflaming the violence in the southern region of Mindanao.

"The EU believes strongly that the conflict in Mindanao can only be resolved through dialogue," it said in a statement.