Thousands protest against Philippines' Arroyo

MANILA (Reuters) - Thousands of people rallied in Manila on Friday calling for the resignation of Philippine President Gloria Macapagal Arroyo over a corruption scandal.

Police said around 10,000 people, including left-wing activists, students, religious groups and lawyers, had taken to the streets.

The protests, sparked by a Senate inquiry into government kickbacks in a telecom deal, were the biggest since tens of thousands of people demonstrated against Arroyo in 2005 amid allegations she cheated in elections the previous year.

"We are outraged by the reports of corruption and greed in government," said Maita Gomez, an activist who said she was wearing red because it was the color of anger.

Nuns, priests, artists and office workers danced as a local group belted out tunes, including Bob Marley's "Get Up, Stand up" from a makeshift stage. People waved flags and posters with the words "Out Gloria", one large banner read "Gangster Regime".

"This is a good starting point for future mass actions. By that time, the numbers would have grown significantly," said Renato Reyes, the secretary general of Bayan, a left-wing group.

But analysts said it would be difficult to get more people to join the protests because after three impeachment bids and at least three coup plots against Arroyo, the electorate craves stability and the opposition lacks unity.

"She's still on the safe side," said Earl Parreno, an analyst at the Institute for Political and Electoral Reforms.

"It's a challenge to the political opposition to fan the emotions, I have not seen the spontaneity as in past popular uprisings."

In an interview with Reuters earlier this week, Arroyo said she would complete her final term and in a briefing with investors on Friday, she assured them that the latest allegations were part of the typical political rough-and-tumble.

"These types of charges have regularly emerged even in previous administrations, as part of our less than impressive political culture," said the former economist, whose final term runs out in 2010.

The Senate inquiry has heard renewed allegations that the country's former election chief demanded $130 million to broker a $329 million deal with China's ZTE to build a broadband network for government agencies.

The election official denied the charge, but the deal was scrapped last year.

MERRY-GO-ROUND

But political analysts say the president's position appears safe due to support from the military and the lower house of Congress and the apathy of many Filipinos, who are sick of the political merry-go-round in Manila.

Arroyo herself took over after former President Joseph Estrada was ousted following street protests seven years ago. He was later convicted of plunder, but Arroyo granted him a pardon last year.

The latest scandal has, however, unsettled some investors. The Philippine stock index bucked the regional uptrend on Thursday and continued to fall on Friday, finishing down 0.9 percent.

The Philippines is currently on an economic roll, with growth at a 31-year high and the budget deficit at a 10-year low, and Arroyo said the momentum would be sustained despite a slowdown in the United States through accelerated infrastructure spending.

(Writing by Carmel Crimmins; Editing by Raju Gopalakrishnan and Sanjeev Miglani)