WRAPUP 1-Philippines c.bank takes first step to unwind policy

* Central bank raises a bank lending rate

* Holds policy rate at record low

* Raises 2010 CPI forecast, says inflation manageable

* Analysts see policy rate hike in Q2

By Karen Lema and Manolo Serapio Jr.

MANILA, Jan 28 - The Philippine central bank raised the rate on one of its short-term lending facilities on Thursday in a first step to unwinding the easy monetary policies put in place to shield the economy during the global financial crisis.

It held its main policy rate steady at 4 percent, as expected, but with an eye on recovery and higher inflation it raised the short-term lending rate for banks under a rediscounting facility to 4 percent from 3.5 percent.

"It underscores that they do have an exit strategy and are looking forward to remove stimulus to stem inflation," said David Cohen, economist at Action Economics.

"Not much impact, but symbolic and in a way similar with the move by China... The thing to remember is that rates are still accommodative after the easing they implemented last year."

The central bank carried out a number of measures to support the economy during the downturn, including cutting its key policy rate to a record low of 4 percent from 6 percent before the collapse of Lehman Brothers in 2008. Analysts expect the policy rate to stay on hold until the second quarter. <PHINT1>

Some major central banks, such as the U.S. Federal Reserve and the European Central Bank, have started to withdraw some of the their stimulus measures adopted during the crisis.

This month China started to tighten policy by raising banks' reserve requirements and accepting higher yields at bill auctions. India is expected to follow suit on Friday by raising bank reserve requirements.

However, only a few central banks, including Australia and Norway, have actually started to raise policy rates.

Explaining the Philippines' move, Central Bank Governor Amando Tetangco said global conditions were more stable.

"Since the risk of contagion from global financial stresses is markedly reduced with the sustained stability in global financial markets, the need for more liberalised pricing of rediscounting loans is now less," he said in a statement.

He had signalled on Jan. 7 the plan to start unwinding policies with a review of the rediscounting rate. [ID:nSGE6060BI]

The new rate takes effect on Feb. 1. For other measures carried out to support the economy see [ID:nSGE60Q03]

The central bank revised up its forecast for average inflation this year to 4.7 percent, broadly in line with private-sector economists, from 4.0 percent previously but emphasised inflation expectations were manageable. [ID:nMNA002592]

All 12 economists polled by Reuters this week had forecast the overnight policy rate would be held steady. Most predicted a rate hike in Q2. [ID:nSGE60K02S]

For a graphic on policy rate, GDP and inflation, see http://graphics.thomsonreuters.com/0110/PH_RTS0110.gif

"An April move - barring adverse economic pullback - will really be a signal that the central bank is attempting to stay ahead of the curve," said Vishnu Varathan, economist at FORECAST PTE.

"The move will be a token 25 basis points when it comes, and one that will prime markets for appropriate setting given that the next meeting will only be in June."

The central bank said on Wednesday annual inflation is likely to accelerate to 4.5-5.4 percent in January from 4.4 percent in December on higher food, utility and fuel prices. The higher end of the forecast would be the fastest rate since March last year. [ID:nnMNA002582]

Economic growth quickened to 1.8 percent in the fourth quarter, on an annual basis, from revised 0.4 percent in the third quarter, data showed. Annual growth is likely to be faster in the first quarter than in the fourth quarter last year, the economic planning secretary said on Thursday. [ID:nSGE60Q0E7]

Average inflation is expected to hit 4.8 percent in this year and reach 5.2 percent in 2011 while gross domestic product will likely rise 4 percent in 2010 after gaining 0.9 percent last year, a quarterly Reuters poll showed earlier this month. <PHPOLL1> (Additional reporting by Rosemarie Francisco, Royce Cheah in KUALA LUMPUR; Writing by Kazunori Takada; Editing by Neil Fullick))