Yes, illegitimate children are still allowed to a portion from the property left by their parent. it is considering that Article 887 of the Civil Code of the Philippines specifies the list of compulsory heirs, which allow for illegitimate children, together with legitimate children, as among those
designated to be compulsory succeed to from what was left by the dead parent.
The statute recognises as legitime the reserved portion of a dead’s estate for his compulsory heirs (Art. 886, Civil Code of the Philippines). In effect, legitime is reserved for compulsory heirs, and it is from this portion of the dead’s estate where illegitimate children, such as your sister’s children, can get their share from their parent’s estate.
It is also significant to point out that the law obliges illegitimate children to establish their lineage with their dead parent, in order they can be classified as compulsory heirs. The child’s birth certificate is the best proof of filiation, and it will be their basis, so they can be able legally insist their share from property left by their dead parent.