Colliers Philippines has issued a stark warning that the ongoing conflict in the Middle East could significantly impact the Philippine real estate sector, particularly the residential market, as remittances from overseas Filipino workers (OFWs) face potential disruption. The property advisory firm highlighted that the evolving geopolitical situation may create uneven effects across different property segments, with residential demand likely to face headwinds from weaker remittance inflows, while industrial assets could see benefits from shifting logistics strategies driven by escalating fuel costs.
Residential Market Vulnerability
Joey Roi Bondoc, research director at Colliers Philippines, emphasized that prolonged tensions in the region could negatively affect remittance inflows, which constitute a substantial portion of household spending in the country. "Remittances from the Middle East comprise nearly 20 percent of total inflows. If the conflict persists, this could soften remittance growth and, in turn, affect residential demand," Bondoc stated.
He further explained that lower remittances are expected to dampen demand for housing, especially in the affordable to lower mid-income segment, where property prices typically range from P2.5 million to P7 million per unit. Bondoc added that households reliant on remittances may prioritize essential expenditures amid uncertainty, potentially postponing purchases of big-ticket items such as homes. "Remittance-receiving families are expected to focus on necessities, which could result in deferred property acquisitions," he noted.
Remittance Data and Trends
According to the Bangko Sentral ng Pilipinas, overseas Filipino cash remittances reached US$3.02 billion in January 2026, marking a 3.5 percent increase from the $2.92 billion recorded in January 2025. The United States remained the top source of cash remittances to the Philippines in January 2026, followed by Singapore and Saudi Arabia. This data underscores the critical role of remittances in the Philippine economy and their potential vulnerability to geopolitical instability.
Industrial Property and Logistics Shifts
Meanwhile, Colliers flagged emerging cost pressures in the logistics and industrial property segments as fuel prices surged. Julius Guevara, senior director and head of Capital Markets and Investment Services at Colliers Philippines, reported that shipping and logistics firms have begun imposing fuel surcharges of at least 25 percent, as diesel prices climb past P100 per liter.
"We are seeing transportation fleets being adversely affected by higher fuel costs. While warehouse lease rates have yet to increase, we expect demand to shift," Guevara said. He elaborated that logistics players may prioritize warehouses located near ports and major expressways to reduce transportation expenses. "Facilities with strategic access and modern, efficient designs are likely to see stronger demand as companies seek to optimize costs," he added.
Broader Implications
The dual impact of geopolitical tensions and rising fuel costs presents a complex scenario for the Philippine real estate market. On one hand, the residential sector faces potential softening due to reduced remittance-driven purchasing power. On the other hand, industrial properties may experience increased demand as businesses adapt to logistical challenges. This dynamic highlights the interconnectedness of global events and local economic sectors, emphasizing the need for strategic planning and resilience in the face of uncertainty.
