UPDATE 1-Philippine c.bank holds fire on rates after strong growth

By Karen Lema and Neil Jerome Morales

(Adds quotes, inflation forecasts, background)

* C.bank keeps policy rate steady at 4.00%

* Cbank says firm domestic demand, low inflation to support growth

* C.bank cuts 2019 CPI forecast but keeps 2020, 2021 estimates

By Karen Lema and Neil Jerome Morales

MANILA, Nov 14 (Reuters) - The Philippine central bank kept its benchmark interest rate on hold on Thursday, after surprisingly strong economic growth in the third quarter, saying that future policy decisions will depend on the health of the economy and inflation trend.

The Southeast Asian country is one the fastest-growing in the region, propped up by government spending and strong consumer demand, but is facing growing risks as global trade slows from the impact of the Sino-U.S. trade war.

The central bank left the rate on its overnight reverse repurchase facility at 4.0%, as correctly predicted by all 10 economists in a Reuters poll.

"The Monetary Board believes that prevailing monetary policy settings remain appropriate. This is supported by benign inflation outlook and a firm outlook for domestic economic growth," Bangko Sentral ng Pilipinas officer-in-charge Francisco Dakila told a news conference.

The economy clocked stronger-than-expected growth of 6.2% in the third quarter, giving the authorities more leeway to allow the effect of previous monetary policy loosening to take effect.

But uncertainties from an unresolved Sino-U.S. trade war, and questions over the ability of the government to sustain efforts to catch up with its spending plan, cast a shadow over the country's growth outlook.

To meet the low-end of this year's 6%-7% growth target, the economy must grow at least 6.7% in the fourth quarter, a pace which economic officials have said was doable.

"Next year, the government will be chasing a higher growth target of 6.5-7.5% and BSP may likely need to shore up the fiscal stimulus while inflation dynamics allow them to do so", said ING economist Nicholas Mapa.

Domestic demand, which accounts for just under 60% of the country's gross domestic product, should continue to get a boost from slowing inflation, which averaged 2.6% in the nine months to September, well inside the central bank's 2%-4% target.

The central bank lowered its average inflation forecast for 2019 to 2.4% from 2.5%, but it kept its price projections for 2020 and 2021 at 2.9%.

Nine of the 10 economists in a Reuters poll expected policy rates would be kept steady for the rest of the year, and the majority of them said the central bank would resume cutting rates as early as the first quarter of next year.

Cooling inflation has allowed the central bank to cut interest rates by a total of 75 basis points this year, reversing some of last year's rates hikes which totalled 175 bps.

The central bank also reduced the amount of cash that banks must hold as reserves by 300 basis points, with another cut of 100 bps to take effect in December, bringing the ratio to 14%. (Editing by Jacqueline Wong)