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EM ASIA FX-Ringgit over 1-week high on oil; Malaysia budget eyed

* Malaysia PM Najib seen unveiling populist budget
    * Philippine peso near 1-mth peak on budget surplus, inflows

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Oct 20 (Reuters) - Malaysia's ringgit on Thursday
hit its strongest level in more than one week thanks to higher
oil prices, while investors awaited unveiling of the country's
2017 budget on Friday.
    The Philippine peso touched a near one-month high
on a budget surplus in August and after the local equity market
 on Wednesday saw the largest inflows in three weeks.
Sentiment improved on hopes that President Rodrigo Duterte's
foreign visits would create an inflow of business. He is in
China this week. 
    The ringgit gained 0.5 percent to 4.1700 per
dollar, its strongest since Oct. 11, as a jump in crude prices
eased concerns over Malaysia's oil and gas revenue. U.S. crude
prices on Wednesday hit a 15-month peak due to a drop in U.S.
stocks and an expectation of an OPEC-led cut in production.
    Malaysian Prime Minister Najib Razak's 2017 budget, due on
Friday afternoon, is expected to feature a raft of populist
measures in a bid to assuage voters unhappy with his leadership
and rising living costs. 
    That could support economic growth, but any widening of the
fiscal deficit at a time the economy is cooling could risk
downgrades to Malaysia's sovereign debt.
    "If the budget sticks to fiscal consolidation path, it will
be positive for the ringgit," said Qi Gao, FX strategist for
Scotiabank in Singapore.
    "But if that's a populist budget, it will spur bond outflows
and undermine the ringgit ahead of a FOMC meeting in December,"
Gao said, referring to the Federal Open Market Committee. The
Fed is expected to raise interest rates at the December meeting.
    Most emerging Asian currencies took a breather ahead of a
European Central Bank monetary policy meeting later in the day.
    The main focus is whether ECB President Mario Draghi will
give any indications that the bank is poised to taper its bond
purchase program. The ECB may defer until December any changes
to its asset purchases, sources familiar with the discussion
said last week. 
    "The ECB meeting and press conference will likely focus on
the tone regarding tapering or extension of the QE," said Nordea
Markets' chief analyst Amy Yuan Zhuang in Singapore, referring
to quantitative easing.
    "We won't have any clear-cut answer but a signal of
extension would be Asia positive and tapering would be
    A tapering could reduce global liquidity, hurting investors'
appetite for higher yields in emerging Asia.
    The peso rose 0.4 percent to 47.975 per dollar,
its strongest since Sept. 23.
    The Philippine government had a budget surplus of 32.6
billion pesos in August, only the second monthly surplus this
year, the government said earlier. That helped narrow the budget
deficit so far this year. 
    Foreign investors bought a net 1.07 billion peso ($22.29
million) of Manila stocks on Wednesday, the largest daily
purchase since Sept. 30, the Philippine Stock Exchange data
showed, and domestic stocks jumped 2 percent that day.
    The Philippine currency pared some of earlier gains as
caution remained over Duterte's policies, especially his war on
drugs, and anti-American outbursts, which have boosted fears of
capital outflows. In September, the peso suffered its largest
monthly loss in 16 years.
    The market is "positive" on the president's China trip, said
a senior Philippine bank trader in Manila.
    But some peso strengthening "feels corrective in nature. To
what extent the correction lasts is tricky as too much political
noise was priced in," the trader said.
    The currency has a chart resistance at 47.965, the 23.6
percent Fibonacci retracement of its depreciation from June
through October, analysts said. A clear break of the level could
lead the unit to 47.680, its high on Sept. 21, they added.
    Change on the day at 0430 GMT
  Currency               Latest bid   Previous day  Pct Move
  Japan yen                  103.61         103.46     -0.15
  Sing dlr                   1.3884         1.3867     -0.12
  Taiwan dlr                 31.512         31.518     +0.02
  Korean won                1126.30        1123.20     -0.28
  Baht                        34.91          34.87     -0.11
  Peso                       48.010         48.160     +0.31
  Rupiah                      13000          13005     +0.04
  Rupee                       66.73          66.67     -0.09
  Ringgit                    4.1770         4.1900     +0.31
  Yuan                       6.7398         6.7385     -0.02
  Change so far in 2016                                     
  Currency               Latest bid  End prev year  Pct Move
  Japan yen                  103.61         120.30    +16.11
  Sing dlr                   1.3884         1.4177     +2.11
  Taiwan dlr                 31.512         33.066     +4.93
  Korean won                1126.30        1172.50     +4.10
  Baht                        34.91          36.00     +3.13
  Peso                        48.01          47.06     -1.98
  Rupiah                      13000          13785     +6.04
  Rupee                       66.73          66.15     -0.87
  Ringgit                    4.1770         4.2935     +2.79
  Yuan                       6.7398         6.4936     -3.65

 (Reporting by Jongwoo Cheon; Additional reporting by Reuters FX
Analyst Krishna Kumar in SYDNEY and Karen Lema in MANILA;
Editing by Richard Borsuk)