MANILA - The country's inflation rate likely bottomed out at 0.1% in August, according to the Development Bank of Singapore (DBS).

"The August reading will probably mark the bottom of the trend, before steadily climbing towards 3% or higher by the year-end as base-year effects dissipate," DBS said.

Philippine consumer prices rose 0.2% in July, the slowest pace in more than 2 decades. The July figure brought the average rate for the first 7 months of the year to 4.3%.

The official inflation data for August is set to be released on Friday, September 4.

Earlier, the Bangko Sentral ng Pilipinas (BSP) said it was expecting the country's inflation to come in at between -0.3% and 0.6% in August. For the full year, the BSP said consumer prices are likely to grow from 2.5% to 4.5%.

The BSP has already slashed its key policy rates 6 times since December, bringing the overnight borrowing rate to a record low of 4% and the overnight lending rate to 6%.

Philippine consumer prices peaked at a 17-year high of 12.5% in August last year after crude oil prices in the world market skyrocketed to $147 per barrel in July. The country's inflation rate reached 9.3% and 2.8% in 2008 and 2007, respectively.