MANILA, Oct 26 (Reuters) Joseph Estrada, the playboy former leader of the Philippines, was preparing for life as a free man today as President Gloria Macapagal Arroyo faced criticism for rushing through his pardon.

Arroyo set aside her ousted predecessor's life sentence yesterday, just six weeks after he was convicted on corruption charges, raising suspicion the clemency was designed to curry favour with the opposition amid mounting bribery scandals.

''We are disappointed, especially with the haste with which it was done. The timing is very suspect,'' said Albert Lim, executive director of the Makati Business Club, the Philippines' main commercial forum.

Arroyo, who was Estrada's vice-president and succeeded him after he was ousted in an army-backed revolt in 2001, is facing fresh controversy over accusations of government kickbacks in a 330 million dollar telecoms deal and allegations of cash handouts to allies.

But analysts say unless dramatic new evidence is unveiled Arroyo's position is secure, saved by a middle class fed up with political squabbling, no obvious candidate to replace her and record economic growth.

The criticism of her decision to release Estrada, famed for his ''midnight cabinet'' of drinking buddies and gamblers, is also not expected to bubble over into popular outrage.

''I don't think there is going to be a hell of a lot of popular fallout for her other than just giving more ammunition for the opposition to beat her up a little bit,'' said Tom Green, executive director of Pacific Strategic Assessments, a risk consultancy.

''All the polls say that people favour turning Estrada loose.'' Estrada, 70, has pledged not to seek public office, but the former movie star is still popular among poor voters who often refer to him by his nickname ''Erap'' and, as a figurehead for anti-Arroyo groups, could stir up trouble for the president.

''I reiterate my wish to spend the rest of my life as plain citizen Erap. However, this does not mean turning my back on my commitment to our people,'' Estrada said in a statement.

Financial markets shrugged off the damage to the Philippines' credibility from his impending release, with the stock market closing <.PSI> up 0.45 per cent and the peso quoted at 44.03 against the dollar, compared with 44.04 yesterday.

''It is the fundamentals that's been keeping the market up so I think that would continue to be the case,'' said Jose Vistan, of AB Capital Securities.

''If these (political scandals) would continue to drag on for an extended period of time, eventually it will have an impact on share prices but as of now, the market is awash with so much liquidity both local and foreign money.'' Three bishops have called for Arroyo's resignation and an online petition calling for her and vice-president Noli de Castro to stand down to allow a snap election has gathered 250 signatures since it went live five days ago.

''It's a groundswell of citizens who are disgusted, fed up with all of these things,'' said Marietta Goco, one of the signatories and a former head of the country's anti-poverty commission.

But Arroyo, who has survived two impeachment bids and at least two coup plots, has a track record of shrugging off challenges.

''If you are asking me, are we going to call for resignation? No, because we already did before and she ignored that so why will we waste our breath,'' the Makati Business Club's Lim said.

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