This is a familiar or an imp type creature. The Toyol is a spirit that is invoked by a bomoh (Malayan witch doctor) from a dead foetus. These people who possess a Toyol usually use them to do mischief, like steal money and sabotaging people. As these are children spirits, they are not very intelligent and are easily distracted by toys and things they can play with. People who have these creatures usually have an urn in their home with the dead foetus with embalming fluid in their homes. However, it is said that you cannot get rid of a Toyol once you have one and it is passed down from generation to generation. To keep these creatures happy, you have to feed it a few drops of your blood once a day and give it offerings of toys and a lot of attention. Supposedly, these are able to be seen without having the evil/magic eye and look similar to House Elves in Harry Potter.
My informant was informed of this when she was growing up in Singapore in the 1990s. This was something that she heard while at Primary five camp at her school at Camp Christine, which was rumored to be haunted. So, as kids are wont to do, they shared scary ghost stories in their beds and one of her classmates told her this story.
There are many variations of this particular creature as well. One of which is that the person can buy these spirits from the bomohs, in others people have to create them. A variation says that people can get rid of them by throwing the urn into the sea, or burying them with the proper rites and respect. Also, feeding a Toyol in one version, has to be fed from blood from the owners big toe, in another it requires fresh rooster blood.
As superstitious beliefs run rampant over most of the countries with people that are mostly uneducated and have strong beliefs in Black Magic and the woods. This was also a convenient excuse for things going missing and bad luck. However, while there is no concrete evidence for anything supernatural, according to my friend, there have been reports of sightings of these creatures.