The Philippines is positioned to conclude 2025 with cautious optimism, according to the latest analysis from property consultancy Colliers Philippines. The anticipated year-end upswing is expected to be fueled by traditional holiday spending, steady remittances from overseas workers, and the distribution of year-end bonuses.
Economic Performance and Challenges
This optimistic outlook emerges despite a significant economic slowdown recorded in the third quarter. The economy expanded by just four percent during this period, marking its weakest growth pace since 2011. The slowdown has been attributed to softened household consumption and reduced infrastructure spending by the government.
These factors have pulled the year-to-date economic growth down to five percent, which falls below the government's target range of 5.5 to 6.5 percent. This underperformance has contributed to recent credit rating downgrades for the country. Nevertheless, the Philippines maintains its position as one of Southeast Asia's faster-growing economies, trailing only Vietnam's impressive 7.7 percent expansion.
Property Market Shows Mixed Resilience
Colliers' market report reveals a property sector displaying varied signs of strength and challenge. Metro Manila's office demand exceeded full-year projections, driven largely by pre-leasing activities in new developments and strengthened business operations in provincial centers, particularly Cebu.
While vacancy rates have shown improvement, the market continues to face regulatory uncertainties. Proposed anti-outsourcing regulations remain a significant concern that could impact future investor sentiment and market stability.
Provincial Office Market Expansion
The first nine months of 2025 witnessed substantial growth in office transactions outside the National Capital Region. Deals reached 210,000 square meters, up from 184,000 square meters during the same period last year.
Cebu emerged as the dominant player in the provincial office market, capturing an impressive 52 percent share of all transactions. Major international companies including Asurion, Concentrix, Virtual Staffing Solutions, Wipro, Optum, and EXL Service secured spaces across key Cebu developments.
These transactions were concentrated in prominent business locations such as Faustina Center, Filinvest Cyberzone Cebu Towers 2-4, Robinsons Cybergate Cebu, and Central Bloc Corporate Center Tower 1.
Residential and Retail Sectors Adapt
The residential property sector experienced a notable rebound in pre-selling activities. Approximately 90 percent of net take-up came from affordable to mid-income housing units priced between P2.5 million and P12 million.
Developers are implementing strategic promotions targeting ready-for-occupancy units and focusing marketing efforts on both overseas Filipinos and local workforce segments to maintain demand momentum.
In the retail sector, mall operators have maintained healthy occupancy levels despite consumer spending pressures. This stability is supported by ongoing reinvestment in properties, store upgrades, and expansion into omnichannel retail strategies. Developers have allocated fresh capital for property refurbishments, helping to support space absorption and reduce vacancy rates.
Future Outlook and Strategies
Colliers anticipates that property opportunities will continue to emerge but remain relatively subdued in the near term. The consultancy suggests that both developers and occupiers may need to pursue innovative and asset-light strategies while awaiting clearer policy direction and government fiscal initiatives that could drive sustained growth beyond 2025.
