MANILA - The Philippines' annual inflation rate could fall below zero in August before slightly picking up in the coming months, central bank Governor Amando Tetangco said on Friday.

The central bank forecast the annual change in August consumer prices to range between a 0.3% fall and a rise of 0.6%, after a 0.2% climb in July, the slowest in more than two decades.

"The low inflation forecast continues to be driven by base effects mainly from oil and oil-affected products whose prices have dropped significantly year on year," Tetangco said in a mobile text message to reporters.

"Inflation is expected to take on a slightly increasing pace but still stay in the single-digit path over the forecast horizon."

The government will release the official inflation data for August on September 4.