"This rumor-mongering is not helping the situation any," Arroyo spokesman Ignacio Bunye said over government radio, dismissing rumors that junior officers are plotting to overthrow the government.

He said the officers rumored to be in on the supposed plot had personally assured Arroyo that they were not moving against her, while "the armed forces top brass have said there is nothing out of the ordinary happening that should cause us concern."

The Philippines peso closed at a four-month low against the dollar on Wednesday amid rumors of unusual troop movements in Manila.

It lost more ground in early trade Thursday, with central bank governor Rafael Buenaventura insisting the unit's weakness was due to "seasonal factors" as well as the general movement of Asian currencies against the greenback.

The peso averaged 54.123 to the dollar in mid-morning after plumbing a low of 54.170, having closed at 54.025 Wednesday.

Bunye said Arroyo met a group of junior military officers over dinner on Wednesday.

"They gave the assurance to the president that they are not plotting any destabilization moves even though they have grievances. They laid out these grievances to her and the president assured them that she is open to resolving these grievances," he said.

"We should lay these rumors to rest."

Military officials earlier said the junior officers had been complaining over low pay, corruption, and inadequate housing facilities for soldiers.

The Philippines suffered seven bloody coup attempts in the late 1980s, setting back economic development for years.

WAR.WIRE