* Stocks in South Korea, Taiwan seesaw

* MSCI EM Asia index up 0.4% in choppy trading

* Indonesia stocks hit lowest point since July 2025

* Philippine peso briefly breaches 60-per-dollar level

By Sameer Manekar

March 16 (Reuters) - Stocks in emerging Asia fluctuated on Monday as the Middle East

war kept oil prices elevated and investors on edge, while Indonesian equities fell to an

eight-month low after the president indicated a willingness to exceed the country's fiscal

deficit limit.

A surge in oil prices since the start of the war has rippled through financial markets,

triggered massive equity outflows, and complicated inflation outlook for most central banks,

likely halting their easing cycles.

Equities appeared stable during the day on hopes that a coalition to escort ships through

the Strait of Hormuz would ease supply pressures, but concerns over potential attacks and

uncertainties around diplomatic efforts tempered risk sentiment.

"For Asian economies and FX and rates markets, it boils down to the Strait of Hormuz -

and what it would take to credibly re-open it," MUFG senior currency analyst Lloyd Chan said.

"We are not entirely convinced that these steps the Trump administration are taking now,

including getting allies to help, will meaningfully help on that front."

The MSCI emerging Asia index swung between gains and losses before last

trading up 0.4%, driven by choppy moves in South Korea, which accounts for over a fifth of

the regional index.

Stocks in Seoul fluctuated throughout the session, falling as much as 0.7% before

reversing to trade about 1% higher in afternoon trading.

Equities in Taiwan traded 0.2% higher around noon in Taipei, after earlier gains of up to

1%.

The two East Asian economies, which together account for just over half of the index, are

particularly sensitive to oil price shocks due to their heavy reliance on energy imports.

Indonesia's benchmark Jakarta Composite Index fell as much as 3% in early trading

to its weakest point since last July, while the rupiah made another run at its

lifetime low but stopped short at 16,985 a dollar.

President Prabowo Subianto, in an interview with Bloomberg News on Sunday, said he would

approve a short-term increase in the budget deficit beyond the legal limit of 3% if oil

prices stayed elevated for a sustained period.

His comments come ahead of Bank Indonesia's policy meeting on Tuesday, where a majority

of economists polled by Reuters expect interest rates to remain unchanged for a sixth

consecutive meeting.

Indonesian assets have been under pressure amid persistent fiscal concerns, diminishing

investor confidence in equity markets, and unease over the central bank's autonomy since the

appointment of the president's nephew as a deputy governor.

Indonesia's benchmark index has lost roughly 15% so far this month, and is set to mark

its worst monthly performance in six years, if the trend continues. The decline has been

driven not only by the Middle East conflict but also by Moody's and Fitch ratings downgrades,

as well as the suspension of index reviews by MSCI and FTSE Russell.

OCBC equity strategy head, Low Pei Han, downgraded Indonesian stocks last week, citing

similar factors. "While Indonesian equities are trading at 11.7x forward price-to-equity,

which is undemanding, we believe that potential negatives are only partially priced in at

current levels."

Elsewhere, stocks in Singapore and Malaysia wavered around their prior

closing levels, while those in Thailand edged higher.

Equities in the Philippines slipped more than 1% to a five-session low, while its

currency, the peso, briefly touched the key psychological level of 60 per dollar

before recovering to around 59.84 a dollar, as elevated oil prices continue to weigh on the

net oil-importing currency.

HIGHLIGHTS:

** Yield on Indonesia's 10-year benchmark index flat at 6.819%

** Thai parliament to open amid scrutiny over election ballots

** China's economy builds early momentum in 2026 as risks mount

Asia stock indexes and currencies at 0509 GMT

COUNTRY FX FX FX INDEX STOCKS STOCKS

RIC DAILY % YTD % DAILY % YTD %

Japan +0.11 -1.81 -0.3 3.53

China +0.06 +1.27 -0.71 2.46

India -0.01 -2.80 -0.36 -11.72

Indonesia -0.32 -1.88 -1.37 -18.59

Malaysia +0.15 +3.21 -0.10 1.01

Philippines -0.31 -1.82 -1.23 -1.13

S.Korea +0.07 -3.81 0.76 31.20

Singapore +0.16 +0.34 0.14 4.37

Taiwan -0.35 -1.85 0.01 15.33

Thailand -0.14 -3.16 0.32 12.24