The composite index closed down 11.62 points at 2,078.48. It traded between 2,073.94 and 2,129.51. Volume reached 10.96 billion shares worth 2.72 billion pesos (50.3 million dollars) from Tuesday's 6.36 billion shares worth 2.08 billion pesos.
The broader all-shares index was up 13.80 points at 1,221.60.
Losers led gainers 71 to 44, with 41 stocks unchanged.
Rating agency Moody's Investors Service downgraded the Philippines' long-term foreign and local currency ceilings and ratings, citing concerns over the large build-up in the government's external debt. In a statement, Moody's said the government's increasing external obligations were introducing "heightened vulnerability to shocks despite recent efforts by the government and legislature to enact fiscal reforms."
The main index closed at a fresh five-year high Tuesday after investors shrugged off security concerns over a series of bombings in the Makati business district on Monday that had left 12 dead.
Vistan said most investors, and even the government, were surprised by the two-notch downgrade. A warning by Moody's a few months ago was taken as a sign that the Philippines may either get a one-step cut or even walk away unscathed, he added.
Accord Capital Equities analyst Ron Rodrigo said Wednesday's fall was an indication that investors have looked beyond political and security issues and were instead more focused on the country's economic fundamentals.
Philippine Long Distance Telephone Co was the most actively traded stock, down five pesos to 1,425 pesos.
Metropolitan Bank Trust Co was second most active, up two pesos at 39.00 pesos.
Globe Telecom gained five pesos to 935.00 pesos. Ayala Corp was down 30 centavos to 8.30 pesos, while unit Ayala Land fell 60 centavos to 9.20 pesos.
Manila Electric Co B, available to foreign investors, was steady at 27.00 pesos. Manila Electric Co A was unchanged at 17.25 pesos.
San Miguel Corp B, available to foreign investors, was unchanged at 80.00 pesos while San Miguel A ended steady at 57.50 pesos.