By Carmel Crimmins

MANILA (Reuters) - Thousands of people streamed into Manila's financial district on Friday calling for the resignation of Philippine President Gloria Macapagal Arroyo in a colorful outpouring of placards, prayers and chants.

Police estimated between 13,000 and 15,000 people had gathered, but independent estimates put the crowd at over 25,000.

Priests in white cassocks recited the rosary, university students shouted "Fight for Truth" and office workers from nearby high-rise buildings sprinkled confetti.

"Goodbye Gloria" and "Kick out Gloria, Change the System" were among the hundreds of placards held up.

Former presidents Corazon Aquino and Joseph Estrada sat beside each other at the side of a makeshift stage, a stone's throw away from the local stock exchange.

An earlier drizzle had lifted and protesters released green balloons after organizers designated it to be the color of "truth".

Opposition groups expect up to 40,000 to demonstrate but some people have been held up by police checkpoints.

Arroyo has survived three impeachment bids over allegations of corruption and vote fraud and at least three attempted coups, and analysts say she is in no imminent danger from the protests. 

The latest scandal has erupted over alleged kickbacks in a government telecoms deal with China's ZTE Corp.

"The political opposition have been relentless in trying to hunt down President Arroyo for some time. They have not had any success in reality but that won't stop them from doing it," said Mark Condon of risk consultancy Pacific Strategies & Assessments.

"I would certainly expect the political noise to continue."

Investors have largely shrugged off the political noise in Manila, helping the main stock index to finish up 0.55 percent on Friday in contrast to regional losses.

The peso, which hit eight-year highs earlier this week, closed at 40.455 against the dollar, slightly stronger than Thursday's close at 40.48.

CYNICAL

Although deeply unpopular, Arroyo's position looks secure because she has the support of the military and after two "people power" revolts, many Filipinos are cynical about what a third will bring.

Around 1 million people took to the streets to overthrow dictator Ferdinand Marcos in 1986 and up to half a million helped oust Joseph Estrada in 2001 in a military-backed revolt. Even the biggest predictions for Friday's turnout pale by comparison.

Opposition groups are hoping the protests will snowball but earlier this week the powerful Catholic Church stopped short of calling for Arroyo's resignation. 

But for some Filipinos, allegations of widespread corruption and attempts to prevent witnesses from testifying at a Senate inquiry into the ZTE deal was enough to provoke them.

"She has gone too far, to the point that I'm afraid of her," said Gay Villaluz, a lawyer.

"I idolized her before."

(Additional reporting by Rosemarie Francisco, Karen Lema and Reuters Television; Editing by Sugita Katyal)