Answer: The heavy-gauge PVC pipe could work if it survives the hoisting and insertion process. I don't think the softer modulus of the PVC is an issue at all. The PVC pipe will be totally encased in the reinforced concrete. Both the PVC pipe and a grouted-in ABS inclinometer pipe inside will move as the wall moves, they will be slaved to the concrete as weak members.
The main issue is how well the PVC is attached to the cage to survive bending during hoisting and the uplift force acting at the bottom cap of the pipe in the fluid concrete. (Please calculate the forces to find out what you are dealing with, tying wire may not be sufficient.)
A steel pipe would be stronger and heavier in this situation and would be preferred by most contractors. Again, I don't think the lateral stiffness of the steel pipe is an issue in reflecting correct displacements. Should it act as a stiff member, the displacements would be distributed over a slightly greater interval of depth, usually insignificant since the vertical instrument resolution is 0.5 meter.
This is an easier installation if the wall concrete is tremied in after the pipe is inserted with the steel cage and the pipe is filled of bentonite slurry or water.