The bulk of the spending, or P100 billion, will be deployed by SM Prime Holdings, which is looking to double down on its provincial presence by building more malls, offices and homes.
Retail will get plenty of attention, with plans to open 400 new outlets of Alfamart, its minimart chain, and 100 more new stores across other formats. Banking was excluded from the estimated spending budget since figures were not yet finalized.
The SM Group is one of the country’s biggest conglomerates and one of its most richly valued with a market capitalization of over P1 trillion.
Despite its size, the company made history in 2023 as profits surged 25 percent to P77 billion, the largest ever net income in Philippine corporate history. Half of those earnings came from its banks amid high interest rates and strong demand for loans.
SM will need to invest larger sums to sustain expansion and keep growth momentum going.
“Many Filipinos today remain underserved by modern retailing, banking services and integrated property development,” SM Investments president and CEO Frederic DyBuncio said in his message to shareholders during the company’s annual meeting on Wednesday.
The SM Group is also preparing funding to support its non-core portfolio companies.
DyBuncio said subsidiary Philippine Geothermal Production Co. also aims to double its current production of 300 Megawatts of steam production over the next five years.
The group’s hefty spending plans will be partly funded by a new euro medium-term note (EMTN) program that could raise as much as $3 billion.
First reported by Reuters, this alternative funding source could partially cover capital requirements after SM Prime postponed its $1 billion shopping mall initial public offering.
“This is just one avenue where we are diversifying our sources of funding,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
