Insider Spotlight
Revenues climbed 5 percent to P506.8 billion, as steady consumer spending, expanding bank loans and stronger contributions from investments such as mining helped sustain growth across the conglomerate's diverse businesses.
“Ongoing resilient consumer demand supported retail and malls, while portfolio investments delivered stronger earnings,” SM Investments president and CEO Frederic DyBuncio said in a statement on Wednesday.
A bright spot in a slowing economy
SM's performance stood out against a weakening Philippine economy, which grew just 2.5 percent in the first nine months of 2026 as inflation squeezed household budgets and consumer spending lost momentum.
The slowdown deepened in the third quarter, when economic growth fell to 2.1 percent, but SM's diversified businesses continued generating stronger sales and profits, underscoring the conglomerate's resilience in a difficult market.
Where Filipinos are spending
The resilience is particularly visible in SM's consumer businesses, with retail profit climbing 7 percent to P13.1 billion as sales increased 5.4 percent to P335.3 billion, supported by groceries and everyday essentials alongside selective spending on toys, stationery and pet products.
Its malls performed even better, growing revenues by 10 percent to P63.7 billion as more leasable space, higher occupancy and demand for restaurants and leisure activities helped attract customers despite tighter household budgets.
The results suggest consumers are still spending at SM's businesses, although rising prices mean higher sales do not necessarily translate into equally strong growth in the volume of goods purchased.
Strength beyond the consumer
SM's diversified earnings base provides another layer of protection, with banking accounting for 48 percent of profit, property contributing 26 percent, retail 15 percent and other investments the remaining 11 percent.
Credit demand remained strong despite the wider slowdown, with BDO Unibank growing its loan portfolio by 16 percent and China Bank reporting a 19-percent increase, although the figures do not establish how much lending contributed to the group's overall profit growth.
More engines of growth
Beyond its core businesses, SM benefited from a turnaround at Atlas Consolidated Mining as higher copper prices supported earnings, while 2GO's revenues rose 15 percent and Philippine Geothermal Production posted a 13-percent increase.
These investments give SM exposure to mining, transport and energy, providing additional opportunities to generate income when consumer-facing businesses encounter tougher conditions.
Built to keep investing
SM ended September with P1.8 trillion in assets and a net debt-to-equity mix of 31:69, while its established subsidiaries continued financing their own operations and expansion without requiring additional funding from the parent.
With more than 60 percent of annual parent-level cash flows coming from unlisted businesses, the group has room to pursue new investments and return capital to shareholders through higher dividends and an active share buyback program, even as the economic outlook becomes more challenging.
—Edited by Miguel R. Camus
