Inflation Eases as Market Conditions Improve

The Philippines property market entered the second half of 2026 with a gradually improving economic outlook.

Inflation declined for a second consecutive month, falling from 7.2% in April to 6.4% in June. Lower fuel and transport costs supported the improvement, while monthly inflation recorded its first decline in a year at -0.3%.

The Bangko Sentral ng Pilipinas raised its policy rate to 4.75%, but inflation is expected to ease further through 2028. Economic growth is also forecast to strengthen from 2.8% in Q1 2026 to 4.4% for the full year, supporting future consumption, investment and property demand. 

Industrial Property Offers the Strongest Prospects

Metro Manila condominiums remain a buyer’s market, creating opportunities for buyers seeking discounted properties. New condominium completions are expected to average only 3,600 units annually from 2026 to 2028, significantly below the 13,000-unit annual average recorded between 2017 and 2019.

This lower supply pipeline could gradually reduce excess inventory. Developer incentives, strong overseas Filipino worker remittances and projected national price appreciation of 25% to 35% by 2031 may support long-term residential demand.

Metro Manila’s office vacancy rate improved to 19%, supported by limited new supply and demand beyond the business process outsourcing sector. Retail vacancy is also expected to fall below 10% as household spending recovers.

Industrial property remains the strongest segment, led by Central Luzon and the Clark corridor. Rising rents, logistics improvements, e-commerce growth and demand for energy-resilient facilities continue to strengthen investment fundamentals.

Outlook

Industrial and Clark corridor assets offer the strongest risk-adjusted opportunities.

Selected CBD offices, retail properties and discounted condominiums also present improving prospects. Investors should remain selective, prioritising quality assets, strong locations and longer holding periods while monitoring inflation, electricity costs and geopolitical risks.