MANILA, Philippines ? (UPDATE) Shares advanced but closed off highs on Wednesday as investors chased bargains like Philippine Long Distance Telephone Co. (PLDT), encouraged by an upbeat Wall Street looking forward to another cut in US interest rates this week.

?It's primarily because of PLDT. The disclosure that they will be buying back two million shares of PLDT is perceived by the market as a sign of management's confidence in the value of the stock at current levels,? CitisecOnline.com president Conrado Bate said.

PLDT said its board approved a share buyback program of up to two million shares representing 1.1 percent of the company's total outstanding common shares. The plan involves requiring the shares ?on an opportunistic basis? direct from the open market through the PSE or the New York Stock Exchange (NYSE).

PLDT, whose shares are also traded on the NYSE, added that the share buyback program reflects the company's commitment to capital management as an important element in enhancing shareholder value.

PLDT said the buyback also manifests the company's confidence in the inherent value of its shares especially at times when from time to time the market value falls below such level.

The Philippine benchmark index rose as much as 2.3 percent early in the session but investors were quick to lock in some gains ahead of the Fed's decision.

The 30-company composite index finished up 32.29 points or 1.0 percent at 3,256.53, off a high of 3,298.12.

The broader all-share index gained 7.52 points or 0.4 percent at 1,977.98.

But decliners outpaced advancers 75 to 37, while 53 were steady.

Volume traded was 1.6 billion shares worth P3.3 billion.

US stocks rose Tuesday as the Federal Reserve's two-day meeting kicked off, with investors angling for a rate cut of as much as 50 basis points. That would mean a full 125 basis point-cut for this year so far after the Fed's emergency cut last week.

"In an uncertain environment like this, investors are expected to take any upturn as an opportunity to sell at fairly good prices," said Ron Rodrigo, research head at DBP-Daiwa Securities.

Some analysts warned that a rate cut of only 25 basis points may disappoint Wall Street, as it may be viewed as not enough to avert a US recession. There is also a possibility that the Fed may not do anything at all for the meantime.

"The tentative market mood could reverse anytime should the Fed actually hold such a rate cut, and should economic issues, both in the US and here, show some deterioration," said Francisco Liboro, president of PCCI Securities.

Besides Wall Street's reaction to whatever decision the Fed will make, investors will also be keeping an eye on the Philippine central bank which holds its policy meeting on Thursday.

Local policymakers are widely expected to trim interest rates for the fourth straight meeting. But the question is how far they will go after last week's emergency 75-basis-point cut by the Fed and the widely-anticipated cut later Wednesday.

Investors will also be paying attention to the 2007 Philippine gross domestic product data due out on Thursday. Economists polled by Thomson Financial are expecting annual growth of up to 7.0 percent, the fastest in three decades, on robust domestic demand.

PLDT rose P100.00 or 3.6 percent to close at P2,910.00, off a high of 2,975.00.

Overnight, PLDT's American Depositary Receipts gained 4.3 percent.

PLDT plunged to a five-month low of P2,520.00 on Jan. 22 when panic-selling due to fears of a recession in the US rattled equities markets across the globe. It hit an all-time high of P3,285.00 in October last year.

Ayala Corp., the country's largest conglomerate, gained P7.50 or 1.6 percent at P467.50, off a high of P470.00.

Food and drinks conglomerate San Miguel Corp.'s A-shares, reserved for Filipinos, fell 50 centavos or 0.9 percent to P54.00. Its B-shares, which have no ownership restriction, shed P1.00 or 1.8 percent to P54.00.

($1 = P40.61)