SM Investments Corporation Confident in Philippine Economic Growth Outlook

SM Investments Corporation (SM Investments) has expressed strong confidence in the Philippines' economic growth trajectory. In a series of interviews, particularly on CNBC and Bloomberg, Executive Vice President for Treasury, Finance, and Planning, Erwin G. Pato, highlighted the company's commitment to the future of the nation's economy. This confidence is fueled by the group's strategic investments across various sectors, including retail, real estate, and financial services.

The group recently announced an impressive PHP60-billion share buyback program, marking it as one of the largest in the corporate history of the Philippines. This move signals SM’s optimism regarding its own valuation and the overall economic environment in the country. Mr. Pato stated, "We're having this buyback because we believe in our company and its growth potential." He reinforced that the Philippines' growth is primarily driven by consumption, noting that about 70% of the country's Gross Domestic Product (GDP) is consumption-focused.

In terms of financial performance, SM Investments reported a robust 7% increase in its consolidated net income for 2024, rising to PHP82.6 billion compared to PHP77.0 billion in 2023. SM Retail Inc., the group's retail business, also showed notable growth, posting a net income of PHP20.9 billion, an uptick from PHP19.9 billion the prior year. Mr. Pato described SM as a "proxy of the Philippine economy" due to its extensive scale and the communities it serves.

With interest rates decreasing, Mr. Pato believes this will bolster macroeconomic conditions and aid in maintaining inflation within a target range of 2% to 4%. This scenario could positively affect consumer spending, which is crucial for businesses that cater to the public's needs.

Moreover, SM Prime Holdings, Inc., the property segment of the SM Group, has earmarked PHP100 billion for development projects this year. These investments, dedicated to enhancing malls, residential complexes, offices, hotels, and convention centers, are anticipated to meet the increasing demand from consumers and corporate entities alike.

SM Investments Corporation stands out as one of the Philippines' leading companies, heavily invested in market-leading enterprises across retail, banking, and property sectors. Their diversified retail operations include grocery stores, department stores, and specialty retail outlets. Additionally, SM Prime Holdings has established itself as the largest integrated property developer in the country, with interests that span malls, residences, offices, hotels, and tourism-related developments.

In banking, SM holds stakes in BDO Unibank, Inc., the largest bank in the Philippines, and China Banking Corporation, which ranks as the fourth largest private domestic bank. With such a robust portfolio and a forward-looking approach, SM Investments is setting a strong example of growth and resilience in the evolving Philippine economy.

For more details, visit SM Investments.