MANILA, Philippines - The central bank said on Tuesday a pay rise of about 6% for minimum wage earners in Manila was consistent with its outlook of manageable inflation and would allow policy to support growth.

The government's wage board increased the daily wage in Manila by P22 ($0.47), and other regional wage boards are still discussing wage hike petitions. It was the first increase since 2008, when wages were raised by P20.

The central bank, which held its policy rate steady and unexpectedly cut its inflation forecasts for 2010 and 2011 at a policy review, had assumed an average wage hike of P25 in June.

"The amount is within our wage assumption. Hence we keep our forecast of 4.7% and 3.6% for 2010 and 2011," central bank Deputy Governor Diwa Guinigundo told Reuters in a text message.

Separately, Governor Amando Tetangco said the central bank's baseline forecasts of manageable inflation "could likely hold."

"This favourable inflation outlook provides us with policy space to support non-inflationary growth, given the still challenging global economic and financial conditions," Tetangco said in a mobile text message to reporters.

Prior to its June 3 policy meeting, the central bank was widely expected to start raising interest rates in the third quarter, but analysts said the cuts in inflation forecasts meant any tightening could be delayed and less than expected.

The central bank slashed rates by a total of 200 basis points between December 2008 and July 2009 and freed up liquidity to soften the blow of the global recession.