MUMBAI, July 5 (Reuters) - India's improving current account balance and the return of foreign inflows into equities have prompted currency analysts to recommend bullish bets on the rupee vis-à-vis other Asian currencies.

While Goldman Sachs' pick is the long rupee/short Philippine peso positions and Societe Generale recommends long rupee/short Chinese yuan bets, one analyst at a Singapore-based hedge fund recommends long rupee bets versus a basket of Asian currencies.

India's current account deficit (CAD) narrowed sharply to $1.3 billion, or 0.2% of GDP, in the January-March quarter, from $16.8 billion, or 2% of GDP, in the September-December quarter.

Goldman Sachs recently revised its forecast for India's 2023 CAD to -1.4% of GDP from -2.4% of GDP, due to the continued benefit of a "significant increase in service exports, mainly driven by software/business services."

On the other hand, Goldman expects the Philippines CAD will be wide, at over 3% of GDP this year due to subdued growth in services exports, potentially higher food imports and a rebound in import-intensive investments.

The disparity in equity flows is another reason why Goldman expects the rupee will perform well versus the peso. India's equity inflows of more than $8 billion so far this year compares with about $1 billion of outflows for the Philippines.

Societe Generale too noted the recent improvement in India's trade and service balances and said that a delayed recovery in China's manufacturing sector will mean stable commodity prices, benefiting the rupee more than the yuan.

Further, China has already eased monetary policy via deposit rate cuts and that would weaken the yuan, Societe Generale said.

India's growth momentum and the rupee's low volatility were other supportive factors for the long rupee/short Asia trade, said the currency analyst at a Singapore-based, Asia-focussed hedge fund.

"You can identify currencies that you can short against the rupee based on macro factors but, for us, a simpler and more efficient way would be to simply buy the rupee against a basket of Asian currencies," the analyst said, requesting anonymity as he is not authorised to talk to the media.

The inputs on the macro factors of each country can be used to decide the weights in the basket, he added. (Reporting by Nimesh Vora; Editing by Savio D'Souza)