A former Philippine diplomat who denounced the government of Philippine President Ferdinand Marcos can be extradited to Australia for prosecution on embezzlement charges, a federal judge ruled in Alexandria yesterday.

The order by U.S. District Court Judge Oren R. Lewis was a setback for Joselito Casilana Azurin, a former charge d'affaires of the Philippine Embassy in Australia who sought asylum in the United States.

Azurin, whose legal battle has drawn support from Filipino dissidents here, is fighting extradition by contending he will be punished for his political views.

A final decision on whether Azurin will be extradited must be made by Secretary of State Cyrus Vance. Murray R. Stein, associate director of the Justice Department's office of international affairs, said yesterday that Vance must reach his decision within two months of Lewis' order unless there are further legal proceedings. Vance has not indicated his views on the dispute.

Philip L. Kellog, Azurin's lawyer, could not be reached for comment last night. A law partner, James L. Lyons, said that Kellogg would consider further legal step, including a possible habeas corpus petition as well as appeals to the State Department. Azurin is now in jail in Northern Virginia.

Azurin, 38, has been charged by Australian authrities with embezzling more than $81,000. He was accused of cashing an Australian check worth $81,023.25 that was payable to the Philippine government and then flying to San Francisco with the money.

Azurin contended that the charge was trumped up by the Marcos government in an effort to have him returned to Australia and then deported to the Philippines for punishment. He described the alleged transaction as part of a kickback scheme arranged by other Philippine officials, an assertion termed "preposterous" by the Philippine government.

In his ruling yesterday, Lewis said, "The burden is on Azurin to prove that Australia's extradition request was for the purpose of trying or punishing him for an offense of a political character. This he has failed to do."

"Australia, not the Philippine government, seeks his extradition for a crime against the laws of Australia," Lewis said. "No evidence was tendered designed to show that Australia sought to punish him for an offense of a political character and no evidence was offered tending to show that the Philippine government had anything to do with this extradition proceeding."

Lewis noted that he was ruling solely on the issue of whether there was adequate evidence to warrant Azurin's return to Australia for trial and not whether the evidence was sufficient to convict Azurin of the alleged embezzlement.

In the legal proceedings in Alexandria, the Australian government was represented by attorneys for the Justice Department. Stein said the Justice Department acted at the State Department's request. Nevertheless, the State Department's move to seek Azurin's extradition could still be reversed by Vance on political or humanitarian grounds, Stein said.