SM sees vibrant Christmas amid inflation downshifting

With inflation expected to be well within the target of the country’s economic managers, officials from the SM Group anticipate a bountiful Christmas season for Filipinos.

SM Investments Corporation vice chairperson Tessie Sy-Coson expressed optimism despite ongoing geopolitical tensions affecting the global supply chain and fluctuating inflation and interest rates.

“Christmas is always good for retailers, so we are hoping and preparing for Christmas. It’s a Filipino celebration, and we all need Christmas. With or without inflation, malls will always be cramped with customers because most Filipinos see malls as places for family gatherings,” she said at the Philippine Retailers Association (PRA) Awards at Solaire North in Quezon City on Wednesday night.

Finance Secretary Ralph Recto projected this month’s inflation rate to fall to 2.5 percent, down from 3.3 percent in August. However, Rizal Commercial Banking Corporation chief economist Michael Ricafort anticipates a slightly higher forecast of 2.6 percent year-on-year for September.

Coson remains confident in the banking sector’s stability, where SMIC operates through BDO Unibank.

“Banks and credit cards are growing strong. Loans are also growing strong as people are looking into more businesses gradually amid taming inflation and high interest rates. We are always positive about that,” she said.

Hans Sy, chairman of the Executive Committee of SM Prime Holdings, received the PRA President’s Award, recognizing him as a retail development visionary.

Echoing this sentiment, Secretary Recto noted that the Monetary Board can afford to cut interest rates further, potentially aligning them with the size of the US Federal Reserve’s rate cut.

SM Supermall president Steven Tan said that mall sales are expected to surge, maintaining nearly double-digit revenue growth, partly due to the many international brands entering the market.

“The Philippines is a very important market for them because of the very young population that the country has. From January to date, there has not been a single month that (our sales) have gone down. August was a little bit soft, but it was because of the transition of the school year. Nevertheless, we are upbeat on the prospects and are sure that all retailers are very excited for this holiday season,” he said.

He also noted that foot traffic in malls has returned post-Covid pandemic, with the first nine months of 2024 showing a growth rate of 6 to 7 percent compared to 2023 revenues.

During the awards night, Hans Sy, chairman of the Executive Committee of SM Prime Holdings, received the PRA President’s Award, recognizing him as a retail development visionary.

The PRA chose Sy for his efforts at integrating technology and innovation into the retail experience.

“Through the years, we have been embracing our role in transforming the country’s retail landscape by providing more business opportunities for local enterprises, jobs, and responsible practices,” he said.

As of May 2024, SM Prime Holdings had 96 malls, with 88 in the Philippines and eight in China. The company aims to build its 100th mall by 2027, and Sy confirmed that they are on track to meet this target.

Economists expect inflation this month to settle between 2.5 to 2.8 percent, primarily due to lower food prices, particularly rice, which saw inflation drop from 14.7 percent to 20.9 percent since July, following a tariff reduction on imported rice.

Security Banking Corp. chief economist Dan Roces said that lower global commodity prices, especially for food and crude oil, could further help align inflation with the Bangko Sentral ng Pilipinas target.