June 30 (Bloomberg) -- The Philippine peso had a fourth quarterly gain on speculation workers abroad sent back more remittances and overseas funds bought the nation's stocks.

The peso was the second-best performer of 10 of the most- traded Asia currencies this quarter as the Philippine Stock Exchange Index reached a record high. Money sent home by Filipinos working abroad exceeded $1 billion for a 12th month in April. The figures are issued with a lag and may rise in May and June as funds are remitted for the start of the school year.

``Overseas remittances are providing inflows and a big demand for the currency,'' said Katie Dean, senior economist at Australia & New Zealand Banking Group. Ltd. in Melbourne. ``People are gaining confidence in the country. The outlook for the peso is strong.''

The local currency's 0.2 percent gain yesterday took its advance for the three months through June to 4.4 percent, and pushed it to 46.245 against the dollar, according to Tullett Prebon Plc, the world's second-largest inter-dealer broker. The peso rounded out its biggest three-month rally since September. It may strengthen to 45 by year-end, Dean said.

The currency this year gained 6 percent, compared with a 0.1 percent loss in the first six months of 2006, as remittances jumped 26.1 percent in the first four months of 2007 to $4.7 billion, according to the latest available data.

The nation's benchmark stock index also had a fourth- quarterly gain. Overseas investors bought $812 million more Philippine equities than they sold this quarter, an increase from a net purchase of $639 million in the first three months, according to stock exchange data.

Accelerating Growth

South Korea's won strengthened this quarter as growth in exports suggested the economy is rebounding from a slowdown in the first three months of the year.

The nation's current account returned to surplus in May for the first time in three months as shipments overseas increased, the Bank of Korea said yesterday. The won rose to the highest in almost 10 years against the yen last week and touched the strongest for 2007 in May versus the dollar.

``There's expectations of interest-rate increases based on good growth,'' said Minoru Shioiri, a senior manager of the currency trading and credit division at Mitsubishi UFJ Securities Co. in Tokyo. ``Under such conditions, investors can put money into bonds or stocks, and a stronger won will make such an investment more attractive.''

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The won gained 1.8 percent this quarter to 923.80 against the dollar, the highest close since May 9, according to Seoul Money Brokerage Services Ltd. The currency edged up 0.7 percent in the first half of this year, compared with a 6.6 percent advance in the same period in 2006. The currency may climb to 920 by mid-August, Shioiri said.

The government will take action to curb the won's gains when needed, Deputy Finance Minister Cho Won Dong said yesterday. ``The government can smooth operations when there are volatile movements in the currency market,'' Cho told KBS radio in Seoul.

Taiwan's dollar had a second monthly advance against the U.S. currency as investors increased purchases of the island's equities.

Taiwan's currency appreciated 1 percent in the quarter and gained 0.9 percent this month, as overseas fund managers bought $9.28 billion more local equities in the three months through June than they sold. The central bank last week increased interest rates for the second time this year, which may help slow the amount of funds shipped offshore in search of higher returns.

Stock Market

``The stock market is a factor outside of interest-rate hikes that's leading to a gaining Taiwan dollar,'' said Philip Wee, a senior currency economist at DBS Bank Ltd. in Singapore. ``Still, there won't be much movement in the short term.''

The local dollar yesterday climbed 0.3 percent to NT$32.735 against its U.S. counterpart, according to Taipei Forex Inc. The currency is the third-worst performer of the 10 Asian most- traded currencies in 2007, falling 0.5 percent, compared with a 1.4 percent advance in the same period last year.

The currency will range between NT$32.5 and NT$35 in the next year, said Wee.

Overseas investors sold more of the island's stocks in the first quarter than they bought, a net $1.34 billion, according to stock exchange data.

So-called carry trades, where investors borrow at low interest rates for better returns abroad, have weighed on the currency this year. After a quarter-percentage point rate increase last week to 3.125 percent, borrowing costs are still the second-lowest in Asia after Japan's 0.5 percent rate.

Singapore Dollar

The Singapore dollar was the worst performer among Asian currencies this quarter on speculation investors slowed the pace of fund inflows into the city because of its low interest rates. The overnight interbank rate in Singapore is about 2.2 percent, compared with a U.S. rate of 5.25 percent.

``The biggest reason for the decline in Singapore, where the economic condition is really strong, is the low interest rate,'' said Takashi Yamamoto, chief dealer of treasury in Singapore at Mitsubishi UFJ Trust and Banking Corp. ``But with the strong economy, the currency will turn and may rise gradually.''

The Singapore dollar dropped 0.9 percent this quarter to S$1.5314. It may advance beyond $1.5000 by the end of this year, Yamamoto said.

Elsewhere in Asia, the Indonesian rupiah rose 1 percent this quarter to 9,030 against the dollar and the Malaysian ringgit gained 0.2 percent to 3.4505. The Thai baht jumped 1.4 percent during the period to 34.53 while the Vietnamese dong dropped 0.6 percent to 16,135.

To contact the reporters on this story: Yumi Teso in Singapore at yteso@bloomberg.net; Jake Lee in Singapore at jlee127@bloomberg.net.

Last Updated: June 29, 2007 19:58 EDT