Giant SM group cues cautious 2024

MANILA  -Billionaire Teresita Sy-Coson, vice chair of the shopping mall and banking giant SM Investments Corp., is cautious about growth in 2024 as spiking tensions in the West Philippine Sea could impact businesses prospects and temper the robust economic outlook.

In an interview with reporters on late Wednesday, Coson also warned against being “too antagonistic” in the wake of recent clashes in disputed waters in the West Philippine Sea after Manila accused Beijing of using water cannons and colliding with a Philippine supply vessel.

“We just have to know who’s our neighbor and work peacefully together. As a business, we don’t know what will happen but we just hope there will be no more skirmishes in that area because whatever happens will affect all of us,” Coson said. “We don’t want to get involved in the US-China [rivalry],” she added.

READ: Another water cannon blast from Chinese ship

Coson’s comments came as the SM Group, the country’s biggest conglomerate by market value, is poised to achieve a banner year, led by record earnings at BDO Unibank and the strong recovery of retail sales and shopping malls, which are located across the Philippines and in China.

“Left to ourselves, we are going to do well but there are geopolitical tensions and climate change,” Coson said.

“I think our group assessment is we are going to be okay but we just have to be watchful,” she added.

Nestor Tan, BDO Unibank Inc., doubled down on the group’s sober outlook.

“While we had a good 2023, we look at it cautiously because we don’t know what will happen,” Tan said on Wednesday.

“[Interest] rates look like they’re stabilizing, which is good, but that means it’s the end of the [profit] spread expansion and [economic] growth so far is in the mid-single digits,” he added.

READ: BSP keeps key policy rate at 6.5%

In October, BDO said net income during the first nine months of 2023 surged 35 percent to P53.9 billion, putting it on course to eclipse record profit of P57.1 billion in 2022.

During the same period, SM Investments’ nine-month net income jumped 30 percent to P55.9 billion—ahead of prepandemic earnings of over P33 billion in 2019.

READ: PH growth expected to accelerate in 2024 amid improving global, local prospects

Last month, the Fitch Group’s BMI Research raised the country’s growth forecast from 5.3 percent to 5.7 percent for 2023 and to 6.2 percent in 2024.