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President Marcos’ recent working visit to the United Arab Emirates represents a fundamental shift in our country’s economic diplomacy, one that would actually change the numbers back home.

Beyond the ceremonial exchanges, the real test lies in the follow-through. After all, a foreign trip only matters if it translates into tangibles in the realm of commercial infrastructure. New establishments, more jobs, uptick in economic stats.

Last Jan. 13, on the sidelines of the Abu Dhabi Sustainability Week Summit, the President witnessed the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the Philippines and the United Arab Emirates. This is not merely a milestone because it is the country’s first free trade agreement in the Middle East. It is also equally important as a strategic “pricing weapon” for Philippine exporters.

The CEPA grants preferential tariff treatment to 95 percent of Philippine exports to the UAE. For local businesses, tariffs are never academic since they determine landed costs and shelf space in a highly competitive global hub. The likely beneficiaries track the real engine of the Philippine export base: agricultural products like bananas and pineapples, electronics, automotive parts, and personal care products.

By making these lines cheaper upon arrival, the administration has improved the rules of the game for exporters, allowing them to use the UAE as a high-income gateway into the broader 11-million-person Gulf market.

While shipping boxes is the visible part of trade, the larger prize is the stable access granted to the services sector, which is the core driver of roughly two-thirds of the Philippine gross domestic product. The CEPA is designed as an “enabling agreement” that secures non-discriminatory treatment for Filipino firms and professionals.

This provision directly impacts three critical groups: service firms as companies in IT-BPM, health care, tourism and construction now have a more stable and predictable environment to operate cross-border; micro, small and medium enterprises (MSMEs) since the agreement explicitly creates pathways for smaller enterprises to scale internationally by providing clearer rules on digital trade and intellectual property; and professionals since for the 900,000 Filipinos in the UAE, the deal recognizes their professional excellence, moving the relationship from labor supply to high-value partnership.

The Marcos administration has sought to raise competitiveness through institutional predictability. By aligning the CEPA with domestic structural reforms, such as the 99-year lease extensions under the Investors’ Lease Act and the CREATE MORE Act, the government is seeking to reduce the friction that has historically deterred capital.

However, preliminary studies indicating a 9.13 percent boost in exports are forecasts, not promises. The real upside will be captured by those who can execute.

The challenge now shifts to domestic agencies: will they build the pathways for MSMEs to understand and meet these new standards?

If the follow-through matches the diplomacy, the January 13 signing will be remembered as the moment the Philippines stopped selling excitement and started selling a rules-based platform for growth.

Cautious optimism

The Philippine property sector is expected to experience another mixed year in 2026, marked by a balance of headwinds and tailwinds – an outcome that is typical for a cyclical property market such as ours, according to property management firm Colliers.

In a recent report, it noted that the Metro Manila residential sector will likely remain a buyer’s market this year, given the substantial yet to be sold inventory and a vacancy rate of 26 percent.

It pointed out that condominium developer launches would likely remain conservative and tempered in 2026, especially with unsold ready-for-occupancy (RFO) inventory still at more than 30,000 units as of the third quarter of 2025.

Colliers projects slower completion beyond 2025, partly due to tempered condominium launches in major Metro Manila central business districts (CBDs) for the past three to four years. It expects that from 2026 to 2028, the average annual delivery will be 3,600 units, which is lower than the 13,000-yearly average from 2017 to 2019, a period when developers hastened completion to capitalize on strong POGO demand.

Data from the report revealed that, from 4,000 units in 2016, condominium completions peaked in 2017 at 16,000 units, then dropped moderately to 12,000 units in 2018 and to 11,000 units in 2019. This then dropped to 3,400 units in 2020. It went up again in 2021 and 2022 at 9,000 units each, then dropped to 4,000 units in 2023.

We are now experiencing the tail-end effects of the POGO ban in 2024. Annual delivery was 8,000 units in 2024, which increased to a projected 9,000 units in 2025. However, this is expected to drop to 6,000 units in 2026, then to 3,000 units in 2027 and to 2,000 units in 2028.

The office sector is likewise a buyer’s market, depending on which area one is looking at.

The Colliers’ report expects that from 2026 to 2028, around 350,000 square meters of new office space will be delivered in Metro Manila, which is only a third of the one million sq.m. completed yearly from 2017 to 2019, or pre-COVID and the peak of offshore gaming demand. The Bay area, Ortigas fringe and Quezon City are projected to account for nearly 60 percent of the new supply.

Colliers likewise expects average lease rates to remain stable in 2026, but submarkets with below-industry-average vacancies, such as the Makati CBD, Fort Bonifacio and Ortigas Center, are likely to record a marginal rent increase.

Ayala Land, also in a December report, is more optimistic, but in a cautious way, describing 2026 as shaping up to be a period of measured opportunity,” it explained.

But while growth is returning, this remains uneven.

Ayala Land noted that while vacancy rates are easing and take-ups are rising, the recovery is not uniform across all segments, as prime business districts and lifestyle-driven developments continue to outperform secondary markets.

It added that, despite overall optimism, certain segments remain under pressure, and concerns persist about high vacancies, surplus inventory, and diminishing yields, particularly in the commercial and mid-market residential sectors.

It also emphasized that hybrid work arrangements continue to drive office demand, leaving many spaces underutilized, and added that the government’s decision to phase out POGOs (Philippine offshore gaming operators) has contributed to vacancies in select business districts.

Ayala Land said that the Philippine real estate market in 2026 is poised for cautious but sustained growth and that, while some sectors face structural adjustments, others, such as retail, industrial and tourism, are leading the recovery, supported by increased consumer spending, tourism recovery, and government infrastructure investment.

It likewise noted that with easing vacancy rates and government support for infrastructure, 2026 offers promising investment conditions.

In another report, David Leechiu of Leechiu Property Consultants said there is a steady recovery in the office sector, driven by continued take-up from IT-BPMs. He said that while Metro Manila’s vacancy rate is currently 18 percent, it is projected to drop to single digits by 2029.

Meanwhile, the residential market remains soft, according to Leechiu, with demand hitting a six-year low and with current inventory expected to be cleared in 3.5 years. However, luxury condominiums remain resilient and residential prices stay firm, he added.

All indications point to a better year compared to last year. That should be a much-welcome development for the property sector, investors, and property users alike.

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