This triggered the circuit breaker or the 15-minute trading halt for investors to compose themselves.
This is the second time that the circuit breaker was implemented. The first instance was on October 27, 2008, during the global financial crisis.
The PSEi eventually closed at 5,736 on Thursday, down by 9.7%. This is the lowest percentage drop since October 27, 2008, when the index fell by 12.3%.
Thursday's close was also the lowest since December 2012, when it fell to 5,636.
The most actively traded stocks were SM Prime (down 11.2%), Ayala Land (down 11.3%), SM Investments (down 12.2%), BDO (down 11.8%), and Ayala Corporation (down 6.3%).
If you invested in the PSEi on the first trading day of the year, you have lost over P2,000 per share you bought.
The broader all shares fell by 8.3% to 3,492.
All other subindices were also in the red, with mining and oil suffering the steepest decline at 12.8%. Property, holding firms, and financials slipped by over 10%.
Luis Limlingan of Regina Capital said the next support level may be at 5,300. A support is a price level where the decline in stock prices is expected to pause as investors start buying the losing shares.
After the local bourse closed, the number of confirmed coronavirus cases in the Philippines rose further from 49 to 52.
Japhet Tantiangco of Philstocks said the rising number of confirmed cases weighed down on the market.
"We're already seeing the initial effects in the form of weakening tourism, job losses, and office shutdowns. And things could get worse since the disease has no cure yet and is not contained," Tantiangco said.