SINGAPORE, Sept 29 — Most South-east Asian stock markets traded flat to higher today, but were on track to close the week lower on capital outflows as rising possibilities of a US rate hike lifted Treasury yields toward nine-year highs and boosted borrowing costs across the region.

"People's expectation of a rate hike last month was below 50 per cent and now it is almost close to 70 per cent based on the implied probability of futures. But I think I would say Asia had a good rally over the last two weeks," said Joel Ng, an analyst with Singapore-based KGI Securities.

"Looking at the data, we have seen an ETF flowback, maybe to the United States or Japan, so those are the two major moves over the last two weeks."

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent, but was down 2.1 per cent for the week.

Philippine shares were Southeast Asia's biggest gainers today, rising 1 per cent on the back of strong gains in the industrial and real estate sectors.

Power generator First Gen Corp and index heavyweight SM Investment rose over 3 per cent each.

For the week, Philippine shares were down 0.5 per cent after three consecutive weeks of gains.

Indonesian shares climbed 0.8 per cent, driven by gains in financials and consumer staples such as Bank Rakyat Indo and Unilever Indonesia Tbk.

Shares were on course to end the week 0.4 per cent lower.

Thai shares were flat ahead of a slew of trade data releases later in the day, with analysts expecting the monthly production index rising to 2.8 per cent on year.

On the other hand, Singapore shares were South-east Asia's biggest losers, hurt by financials. DBS Group Holdings was the biggest drag, declining as much as 1.6 per cent.

"Singapore banks have still relatively held up pretty well, they have had a good run with 25 per cent gains over the last year," Ng added.

For the week, Singapore shares have fallen 0.3 per cent.

Malaysian shares were flat after hitting their lowest in two months. Financial and telecom stocks were the biggest losers. Singapore shares were South-east Asia's biggest losers, hurt by financials. — Reuters