The complete phrase is “kung sa bagay”, but it is not uncommon for us to just say it as “sa bagay”. As Dan Alexis has mentioned, its exact meaning may depend on context, i.e., other English words or expressions may be used in its place provided they fit the intended meaning. The translation I would give it may be found in the phrase itself: “if we are to be objective about it”. It almost always serves to introduce a rationale or a conjecture.
Examples:
Inubos ni John yung mga natirang pagkain. Kung sa bagay, wala naman na sigurong kakain nun. = John ate up the leftovers. If we are to be objective about it/I guess/Well, maybe no one is going to eat that anyway. - conjecture
Si Paul ay sobrang gastador. Kung sa bagay, malaki naman ang kinikita niya. = Paul is a reckless spendthrift. Objectively speaking/However, he earns a high income though. - rationale
Mary: Niyaya ako ni Jane na kumain kami sa labas. Hindi ako sumama kasi baka ako pa ang pagbayarin nun. Kilala na natin yun.
Peter: Kung sa bagay...
Mary: Jane asked me to dine out with her. I did not go because maybe I’d end up footing the bill. We know how she is.
Peter: To be objective about it.../Well... - The implicit and intended meaning of the phrasal response is: "yes, most likely, so I would agree with you." – an agreement to the rationale, at the same time, based on a conjecture.