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By Aaron Pan and Kim Kyoungwha

Aug. 27 (Bloomberg) -- Asian currencies rose, led by South Korea's won, after a finance ministry official said the government will act to stem a decline. The Philippine peso climbed before a central bank meeting tomorrow.

Policy makers in Korea, concerned that a falling currency will raise the cost of imports, have spent billions of dollars in reserves to stem the won's loss. Nine of the 10-most active Asian currencies advanced today as the dollar weakened. Malaysia's ringgit gained after opposition leader Anwar Ibrahim won a seat in parliament in a local by-election.

``Caution in Korea set in after the verbal intervention,'' said Chu In Young, a currency dealer with state-run Korea Development Bank in Seoul. ``Sales from offshore players who have heavily built up dollar positions were notable.''

The won rose 0.6 percent to 1,083.20 against the dollar as of 1 p.m. in Seoul, according to Seoul Money Brokerage Services Ltd. The ringgit climbed 0.4 percent to 3.3763 and the peso gained 0.6 percent to 45.72.

The Korean won is the worst performing regional currency this year and in August. Central banks intervene by selling or buying foreign exchange.

Korea's ``government cannot but worry about the recent won decline,'' Choi Jong Ku, director general of the ministry's international finance bureau, said at a briefing in Gwacheon today. ``We will continue to closely monitor the market status and take measures when needed.''

Philippine Rates

The Philippine peso snapped a two-day loss as economists predict policy makers will increase the benchmark interest rate to a one-year high.

The central bank will raise borrowing costs by at least 0.25 percentage point to 6 percent, according to all 15 economists surveyed by Bloomberg News. Governor Amando Tetangco said Aug. 5 that the bank will maintain a ``tight'' monetary policy after a report showed inflation accelerated to a 16-year high of 12.2 percent.

Traders are ``lightening up their long-dollar positions ahead of the meeting,'' said Paul Joseph Garcia, chief investment officer at the Manila unit of ING Investment Management Ltd. who oversees $1.5 billion in funds. ``Everyone was caught long last time'' when the central bank unexpectedly raised its benchmark interest rate by 50 basis points last month.

An investor who is long purchases a currency seeking to benefit from its rise.

The peso will likely trade between 45.60 and 46 for the remainder of the month, Garcia said.

Singapore Dollar, UBS

Elsewhere, Indonesia's rupiah added 0.2 percent to 9,168 and Thailand's baht gained 0.3 percent to 34.15. Singapore's currency advanced 0.6 percent to S$1.4173 per U.S. dollar, according to data compiled by Bloomberg.

Singapore's dollar will rise 1.2 percent in three months to reach S$1.40 as persistent inflation prevents the central bank from stalling the currency's appreciation, UBS AG said.

Singapore's inflation slowed in July by less than economists had estimated, after holding at 26-year highs in each of the three previous months. The trade ministry urged policy makers to maintain vigilance on inflation while ensuring the currency doesn't hurt exports by appreciating too sharply.

``It remains too early for the central bank to contemplate a move to a neutral bias, much less an outright easing by shifting the policy band lower, although we do not rule out a more gradual appreciation at the October meeting,'' New York-based analyst Benedikt Germanier wrote in a research note yesterday.

Malaysia's ringgit rose on speculation the currency's slump to a nine-month low this week was excessive as investor concern surrounding the by-election receded.

Ringgit, By-Election

The ringgit snapped a two-day loss as Anwar yesterday regained a seat in parliament after a 10-year hiatus, boosting his chances of ousting Prime Minister Abdullah Ahmad Badawi.

``People are selling back dollars,'' said Awaluddin Shariff, a currency trader at EON Bank Bhd. in Kuala Lumpur. ``The way I see it, people are discounting the short-term risk premium now that the by-election is out of the way.''

The currency may rise as high as 3.3650 today, Awaluddin said.

Taiwan's dollar dropped for a third day on speculation a deepening global economic slump will hurt exports and prompt investors to dump more of the island's shares.

The currency traded near a six-month low after reports yesterday showed business confidence in Germany, Europe's biggest economy, dropped to a three-year low and mortgage approvals in the U.K. held close to the lowest in 11 years.

Taiwan this week reported the slowest growth in export orders in five years and overseas investors were net sellers of the island's stocks on nine of the last 10 trading days.

``Emerging markets are now the underdogs,'' said Dong Tao, chief Asia economist at Credit Suisse Group AG in Hong Kong. ``Export demand is slowing down, especially for Asian countries such as Taiwan.''

The currency fell 0.1 percent to NT$31.514 against the dollar, according to Taipei Forex Inc. It yesterday touched NT$31.571, the weakest since Feb. 21.

To contact the reporters on this story: Aaron Pan in Hong Kong at apan8@bloomberg.net; Kim Kyoungwha in Beijing at kkim19@bloomberg.net.