Residential Recovery Moves Into Clearer View The Philippine property market is showing stronger signs of recovery, led by a sharp improvement in residential absorption. In Metro Manila, preselling net take-up surged 765% year-on-year in Q1 2026, driven mainly by the economic and affordable segments. As a result, remaining inventory life fell to 6.8 years, down from a peak of 13.4 years in mid-2025.  Developers are now prioritising the clearance of ready-for-occupancy stock before launching new projects, while completions are expected to decline from 2027 onward. Vacancy is still projected to reach 25.6% by year-end, but this largely reflects earlier supply decisions rather than current demand conditions.  Demand also remains healthy in well-priced fringe locations such as the C5 Corridor and Katipunan, reinforcing the importance of the right combination of product, location and pricing.  Commercial and Industrial Demand Adds Depth The recovery is also being supported by stronger commercial demand. The Philippines is ranked as the world’s second-largest GCC delivery location, with the GCC workforce projected to reach around 289,000 professionals across approximately 200 centres in 2026. This is supporting demand for prime CBD offices and key provincial markets.  Tourism has also improved, with 3.16 million international arrivals in H1 2026, up 5.4%, while hotel average daily rates rose 2.4%. Industrial remains another strong segment, supported by new logistics supply and PHP 81.4 billion in approved foreign manufacturing pledges.  Outlook The Philippines appears to be entering a confirmed recovery phase, but opportunities remain selective. With buyer-friendly pricing gradually being absorbed and future supply becoming more constrained, well-located residential, office and industrial assets may benefit most as the market continues to improve. The contents of this article were contributed by Dara Ko-Saavedra, Head of IQI Philippines. Download to see insights from other country marketsDownload

Industrial and Commercial Recovery Gains Ground The Philippine property market entered the second half of 2026 with recovery strengthening across industrial, commercial and residential real estate. Industrial property remains the standout segment. First-half merchandise exports reached US$46.72 billion, the strongest performance since 1991, supported by electronics demand linked to the global AI supply chain. This momentum is feeding into a 1,200-hectare industrial land pipeline for 2026 to 2028, while industrial rents have increased 45% since 2019. New demand from EV and battery manufacturers is also supporting the sector. Metro Manila’s office vacancy remained stable at 19%, despite softer leasing volumes, while flexible workspace take-up doubled year-on-year. Retail vacancy is expected to fall below 10% by year-end, while around 3,100 new hotel rooms are scheduled for delivery in 2026.  Residential Buyers Still Hold the Advantage The residential market remains firmly buyer-favourable. Inflation eased to 6.2% in July, marking a third consecutive month of improvement, while the BSP was expected to maintain its policy rate at 4.75%. Developers continue to compete for buyers through extended payment terms, rent-to-own structures and effective discounts of 3% to 12%. At the same time, future condominium supply is tightening sharply. Annual completions are expected to average around 3,600 units through 2028, down 72% from the 2017 to 2019 average. Outlook The Philippines is entering a potentially important transition period. Improving inflation, the prospect of lower borrowing costs and a shrinking condominium pipeline could support stronger residential absorption into 2027. Meanwhile, industrial assets remain the strongest structural growth story, supported by exports, manufacturing and infrastructure demand. For investors, the second half of 2026 offers an opportunity to focus on quality industrial assets, flexible commercial space and competitively priced residential properties before financing conditions improve further. The contents of this article were contributed by Dara Ko-Saavedra, Head of IQI Philippines. Download to see insights from other country marketsDownload

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. Juwai IQI Newsletter August 2026Download