A New Zealand bar manager has appeared in court in Myanmar over charges he insulted Buddha.

Philip Blackwood and two local have men pleaded not guilty to insulting religion by posting an advertisement with an image of a pink Buddha wearing headphones.

He was arrested last week after posting the online advertisement for the bar in Myanmar's biggest city, Rangoon.

The charges carry a penalty of up to two years in prison.

The advertisement was removed and an apology posted, but Blackwood and the two men – who also work with the bar – were arrested.

Four prosecution witnesses testified at their first trial session overnight ... defence witnesses will give evidence on December 26.