The country’s inflation rate eased to 0.1 percent in August, its lowest level in more than two decades, but remained on track to hit official targets for the year, officials said Friday.

The annual rise in consumer prices for the month was slower than its 0.2 percent increase in July, as the indices for all commodities except food, beverages and tobacco slowed, the National Statistics Office said.

Excluding volatile food and energy items, core inflation in August stood at 2.9 percent, down from 3.6 percent in July, it added.

Bangko Sentral ng Pilipinas Governor Amando Tetangco said ''monetary settings remain appropriate at this time,'' with key lending rates already having been slashed by 2.0 percentage points since December last year.

''The August inflation figure of 0.1 percent is within our forecast range,'' Tetangco told Dow Jones Newswires.

He said the bank still expected inflation for the year to be within its target of 2.5 percent to 4.5 percent, although at the lower end of the range.

Inflation in the Philippines for the first eight months of the year was 3.7 percent, according to the statistics office.

The last time monthly inflation was so low was in 1987, when the Philippines economy was suffering amid the political turmoil of failed military coups against then-president Corazon Aquino. Inflation slowed in the Philippines this year as the economy suffered amid the global financial crisis. Economic growth was just 1.0 percent year-on-year in the first half, down from 3.8 percent during the same period of 2008. However the Southeast Asian nation of 92 million people has withstood the buffers of the economic crunch better than many other countries in the region. (AFP)