Manila - The Philippine armed forces suspended on Tuesday military operations against Muslim militants to pave the way for negotiations for the release of three Red Cross hostages on a southern island, a navy spokesman said.

Lieutenant Colonel Edgard Arevalo said the military was holding off its offensives against Muslim Abu Sayyaf rebels on Jolo island, 1,000 kilometres south of Manila, to allow negotiations for the release of three captive personnel of the International Committee of the Red Cross.

Manila - Philippine share prices rose 2.05 per cent for the second straight day Tuesday on hopes that a US plan to rid banks of toxic assets would put financial markets on the road to recovery.

The Philippine Stock Exchange's 30-share composite index gained 38.60 points to close at 1,917.69, from Monday's finish of 1,879.09.

A total of 2.633 billion shares worth 3.636 billion pesos (75 million dollars) were traded.

Gainers swamped losers 76 to 16, while 47 issues were unchanged.

Cotabato City, Philippines - A homemade bomb exploded along a highway in a southern Philippine city on Tuesday, but no one was hurt in the third bomb attack this week in the area, a local official said.

The bomb, made from a 60-millimetre mortar shell, went off as a passenger bus passed on the highway in the village of Tamontaka in Cotabato City, 960 kilometres south of Manila.

"It would appear that the bomb was intended for the Husky Bus Company," Cotabato City Mayor Muslimin Sema said.

Manila - The commander of Philippine troops battling Muslim militants holding captive three international Red Cross workers went on leave on Monday after a deal to free one of the hostages collapsed on the weekend.

Marine Major General Juancho Sabban was taking a two-week leave to attend an anti-terrorism conference in the United States starting on March 25, according to navy spokesman Lieutenant Colonel Edgard Arevalo.

Manila  - Philippine shares rose 2.46 per cent Monday on plans by the United States government to buy as much as 1 trillion dollars in toxic assets on banks' accounts.

The Philippine Stock Exchange's 30-share composite index added 45.19 points to close at 1,879.09 from Friday's finish of 1,833.90.

A total of 554.25 million shares valued at 4.73 billion pesos (97.72 million dollars) were traded.

Gainers outpaced losers 53 to 29, with 38 issues unchanged.

Manila  - Single mother Maritess Paloma had a simple dream in mind when she left home to work in Taiwan in June 2008 - to save enough money to buy a house in the northern Philippine province of Bulacan.

The dream crumbled when less than five months later, when she was laid off from her job at a Taiwan semiconductor factory.