EMERGING MARKETS-Philippine assets fall amid political turmoil; Bank Indonesia holds rates

(.) * Philippine Vice President resigns from the cabinet * Indonesian rupiah unchanged post c.bank decision * South Korean stocks hit over two-year high By Rajasik Mukherjee June 20 (Reuters) - The Philippine peso and shares declined on Thursday due to political turmoil, after the incumbent vice president resigned from the president's cabinet, while the rupiah was largely unmoved after Bank Indonesia held interest rates as expected. The peso, which has depreciated around 5.7% this year, lost 0.2%, eyeing its worst day in nearly three weeks, while stocks shed as much as 0.8% to hit their lowest level since mid-December. Philippine Vice President Sara Duterte left President Ferdinand Marcos Jr's cabinet and resigned as the education minister and vice chair of an anti-insurgency task force amid ongoing rumours that the alliance between them was expected to collapse. Duterte will, however, remain the vice president of the Philippines. "The soured political relationship between the Marcos and Duterte camps is a widely accepted reality, and the resignation is an expected offshoot of that, especially with the midterm elections just around the corner..," said Juan Paolo Colet, managing director at China Bank Capital in Manila. The Philippine central bank attributed peso's fall to the strengthening of dollar while assuring that it will keep inflation within its target range of 2%-4% through 2025. In Indonesia, the central bank held its interest rate at 6.25%, adding that the current level remained consistent with efforts to stabilise the rupiah . The currency, which has depreciated over 6% this year and is hovering at a four-year low, remained largely unchanged following the decision, while stocks were up more than 1%. Global market participants are awaiting fresh cues on the Federal Reserve's interest rate trajectory, after the central bank last week signalled only one rate cut for 2024. At 0745 GMT, the dollar index was 105.39. Other emerging Asian currencies, such as the Singapore dollar, Malaysian ringgit and the Thai baht traded flat to marginally lower. Thai shares fell 0.5%, while Malaysian stocks lost as much as 0.6%, set for their fourth consecutive sessions of losses. Taiwanese stocks finished 0.9% higher while South Korean shares ended 0.4% up, hitting a more than two-year high. HIGHLIGHTS: ** Indonesian 10-year benchmark bond yield rises to 7.115% ** Thailand to achieve 3% growth this year, fiscal position strong, finmin says ** Pakistan stocks rise 1% to record high on budget, IMF optimism Asia stock indexes and currencies at 0745 GMT Japan -0.09 -10.85 0.16 15.45 China -0.04 -2.24 -0.42 1.03 India -0.09 -0.39 0.15 8.37 Indonesia -0.37 -6.24 1.31 -6.29 Malaysia -0.04 -2.49 -0.44 9.50 Philippines -0.19 -5.72 -0.34 -1.64 S.Korea -0.20 -6.98 0.37 5.74 Singapore -0.09 -2.40 -0.26 1.70 Taiwan +0.08 -4.94 0.85 30.54 Thailand -0.14 -6.93 -0.50 -8.37 (Reporting by Rajasik Mukherjee in Bengaluru; additional Reporting by Mikhail Flores in Manila; Editing by Rashmi Aich and Mrigank Dhaniwala)