OIL prices and inflation are key indicators that investors must monitor as the Iran war threatens to derail the Philippine property sector’s fragile recovery, Leechiu Property Consultants (LPC) director for investment sales Tam Angel told The Manila Times on Thursday.
“The Bangko Sentral ng Pilipinas just released its March inflation print at 4.1 percent, which is well above the target of 2 to 4 percent range. We think that’s going to keep going up in the coming months. The war started late February, and in March, the print is already at 4.1 percent. So what more would it be in April, in May, and in June?” Angel noted.
The impact of rising oil prices “is immediate, but it also compounds in terms of inflation because goods and commodities also become more expensive over the longer term,” Angel explained.
His comments form part of LPC’s first-quarter 2026 Philippine property market report, which described the sector as “running out of gas” after weathering six consecutive crises since 2019, with the latest oil shock emerging as the most immediate threat to recovery.
Despite early signs of improvement, the outlook remains uncertain as elevated inflation could complicate the BSP’s policy path and weigh down on investor sentiment.
LPC data showed office demand surged 70 percent year-on-year in Q1, while residential sales increased by 19 percent. However, vacancy rates remain elevated and unsold inventory continues to burden the market.
“Industrial and retail are the income plays. Everything else is a value play requiring patience,” Angel said, noting that investors may need to take a longer-term view amid the current volatility.
The hospitality sector is also facing emerging headwinds. “Philippine hotels are entering their most challenging period since the pandemic,” LPC director for hotels, tourism and leisure Alfred Lay said, citing higher airfares and softer consumer spending that could dampen domestic and international travel demand.
Meanwhile, the office market’s recovery, while on track, is likewise unsteady. “At this point... the path forward is becoming less straightforward. The risk lies in whether these requirements can translate into actual transactions amid current uncertainties,” LPC director for commercial leasing Mikko Barranda said.
“Market participants should maintain a cautious stance — closely assessing supply-chain impacts, preserving liquidity, and deferring aggressive expansion until conditions stabilize,” LPC director for research Roy Golez said.
Yet Angel emphasized that the country’s long-term fundamentals remain intact despite near-term challenges.
“The population is there, the consumption engine is there, overseas Filipino worker’s remittances are there, the business process outsourcing economy is there,” he said.