Manila holds rates; rises expected April

The central bank of the Philippines has voted to hold the overnight borrowing rate at 4 per cent and the lending rate at 6 per cent. London-based research firm Capital Economics expects the first increase in the overnight borrowing rate to occur in April, rising gradually thereafter by about 25bp, to end the year at 5.5 per cent. The rate will be increased to combat inflation amid rising government spending, though price rises are expected to be modest due to the peso’s rise against the dollar.