The Philippine Stock Exchange composite index fell 63.27 points to a two-week low of 2,022.66. It traded between 2,016.49 and 2,085.93.
Volume was 7.78 billion shares worth 1.74 billion pesos (31.63 million dollars) after Friday's 6.01 billion shares worth 1.86 billion pesos.
Losers beat gainers 92 to 26, with 42 stocks unchanged.
Dealers said the breach of the 2,070 and then 2,050 support levels led to a deeper correction.
"We've been at overbought levels for quite some time and a correction has long been expected. I see the next support at 1,970 if the 2,020 support does not hold," said Ron Rodrigo of Accord Capital Equities.
"We were expecting a consolidation within the 2,050-2,100 level but this sharp correction could also be a reality check. To some investors, the Moody's downgrade may have left a bad taste in the mouth," said Astro del Castillo of First Grade Holdings Inc.
Moody's Investors Service announced last week a two-notch downgrade of the Philippines' sovereign credit ratings.
Despite the sharp losses on the day, dealers said they remain generally positive about corporate earnings prospects this year, adding that the dip in prices will eventually provide investors with an opportunity to take positions in the coming days.
Philippine Long Distance Telephone, the most actively traded stock, fell 50 pesos to 1,355 pesos, after its New York-listed stocks lost 26 US cents to 25.36 dollars on Friday.
Ayala Land Inc was down 20 centavos at 9.20 pesos and parent Ayala Corp retreated 70 centavos to 7.70 pesos.
San Miguel Corp A-shares were steady at 57.50 pesos but its B-shares were down 50 centavos at 80.50 pesos.