 Bloomberg -- Having suffered the worst first-half performance in any year since 2008, a gauge of Philippines property stocks is faring worse than the nations benchmark index in 2020 after six years of outperformance.The losses have also erased the valuation premium real estate shares typically command over the broader market -- an occurrence thats seen them stage a sharp rebound on more than one occasion in the past. But keeping history aside, things dont look too promising for the sector that houses some of the countrys most-valued companies.A more-than doubling of coronavirus cases in the Philippines in July risks sapping demand and inflicting more pain on real estate stocks. At the same time, a plunge in remittances by overseas Filipino workers and the departure of some Philippine offshore gaming operators -- a key source of office and home demand in recent years -- are also clouding the industrys outlook.The pandemic is a sword of Damocles hanging over all our heads, said Gerard Abad, chief investment officer at AB Capital Investment Corp., which manages the equivalent of 509 million in assets. The risk is greater now and consumer demand is really weak.Manilas land values could fall as much as 15 this year, the steepest drop in a decade as the virus hammers demand, driving down rents and selling prices, according to Joey Bondoc, a Manila-based senior manager at property consultant Colliers International Group Inc.The PSE Property Index tumbled almost 27 in the first six months of the year -- the most in such a period since 2008 -- as residential and commercial demand sank once the virus outbreak forced people to stay at home and shift spending to essential goods. The gauge sank as much as 5.4 on Monday as a stricter lockdown was reimposed in Manila amid record rise in infections.The measure, with a market capitalization of almost 36 billion, is heading for a 34 year-to-date loss. Thats versus a 27 loss for the benchmark Philippines Stock Exchange Index. The MSCI AC Asia ex-Japan Real Estate Index is down 20 this year.Id prefer the consumer sector at this time, particularly manufacturers and retailers of essentials said Robert Ramos, who helps manage 100 billion pesos 2 billion as head of the trust and investments group at Rizal Commercial Banking Corp. The property sector will surely outperform once Covid disappears, but for now people are avoiding malls and they arent buying properties.Like An EarthquakeStill, cheap valuations, an accommodative central bank policy and the governments infrastructure push may prompt certain brave and long-term investors to start buying property stocks, some analysts say. Further, real estate companies are among those carrying the highest weightings in the benchmark, which makes any broad bet on Philippine equities also a bet on the sector.Four core property firms carry a combined weighting of almost 22 in the 30-member PSEi gauge. The sector accounts for over 50 of the benchmark when taking into account diversified companies with real estate ventures.Its like an earthquake hit the sector, said Cristina Ulang, head of research at First Metro Investment Corp. in Manila. But for the long term, it should be a top choice. One cant ignore property to ride a market rebound -- its big part of the index.Updates index movements in sixth and seventh paragraphs.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.2020 Bloomberg L.P. 