The People's Bank of China said on Saturday it would improve the mechanism used to establish the loan prime rate from this month, in a move to further lower real interest rates for companies as part of broader market reforms.

Analysts say the move underscores the government's attempts to use reforms to support an economy that has been hit hard by a bruising trade war with the United States.

Meanwhile, the U.S. Federal Reserve is back in focus this week as investors await the minutes of its July meeting and Chair Jerome Powell's speech at the Jackson Hole symposium, to get further clarity on the central bank's policy stance.

Leading the gains in Southeast Asia on Monday, Philippine shares <.PSI> jumped to a more than two-week closing high. Packaged food maker Universal Robina Corp gained 6.5%, while conglomerate JG Summit Holdings rose 6.1%.

"Investors are calm compared to last week when there was a deluge of negative events," said Rachelle C Cruz, an analyst with AP Securities.

Singapore stocks <.STI> rose 0.4%, with agribusiness firm Wilmar International adding 2.7%, while real estate firm Hongkong Land Holdings advanced 1.6%.

Thai shares eked out gains even as the government cut it 2019 growth forecast after data showed the economy expanded at its slowest pace in nearly five years in the second quarter.

Investors were optimistic that a planned $10 billion stimulus package announced on Friday would provide some support to the slackening economy.

"All eyes are now on the government's announcement of the fiscal stimulus package," ING said in a note, adding that "it needs to be seen how quickly this stimulus gets off the ground to kick-start the economy over the remainder of the year".

Energy and industrial stocks were the top gainers, with oil & gas firm PTT PCL and Airports of Thailand adding 1.2% and 1.4%, respectively.

Vietnam <.VNI> and Indonesian shares <.JKSE> closed marginally higher, while Malaysian stocks <.KLSE> retreated slightly.

Fitch Ratings on Monday raised its 2019 growth forecast for Malaysia after the country reported stronger-than-expected growth for the first half, but flagged intense pressure from exports over the coming quarters.

(Reporting by Niyati Shetty in Bengaluru; Editing by Subhranshu Sahu)

By Niyati Shetty