Pushing forward and growing together

By Frederic C. DyBuncio, SM Investments Corp.

AS BUSINESSWORLD marks its 35th year in an ever-changing and fast-paced industry, it must have recognized the need to move forward even faster, remaining agile and constantly overcoming the challenges of this pandemic.

We share this path.

SM Investments Corp. continues to evolve and invest in our country through the years, regardless of the prevailing economic conditions. This reflects our firm belief in the resiliency of the Philippines and its people that will continue to transcend these economic cycles.

GROWING TOGETHER
While we remain watchful of headwinds from geopolitical risks and their effects on inflation, we are optimistic about consumer outlook as we have seen this gaining momentum in the last quarter.

With renewed prospects for a retail recovery, we expanded our footprint nationwide. As of the first quarter, our store network reached 3,278 stores. And with more than 30 brands across our retail footprint, we serve as a platform for these local and international brands to be more accessible to the Filipino market.

SM Prime Holdings, Inc. has also signaled its optimism, laying out an P80-billion capital expenditure program for the year for its expansion, led by its malls and residential businesses.

SM Prime through SM Hotels and Conventions Corp. recently opened SMX Convention Center Clark, a nod to the growth prospects in the Clark Freeport Zone, with the facility poised to become the area’s preferred MICE (meetings, incentives, conferences and exhibitions) and tourism destination. 

Our banks, BDO Unibank, Inc. and China Banking Corp., both delivered strong net income from sustained growth from their core businesses, increasing their nonperforming loan coverage and ensured strong balance sheets. As of the first quarter, both banks have a combined network of 2,209 branches and 5,547 ATMs.

Across our portfolio investments, we continued to see improved operations and resilient performance. These provide us good growth opportunities as we look for further investments in high growth areas in the Philippines.

Our continued growth is a testament to both the fundamental relevance of our businesses to Filipino consumers and to our long-standing financial prudence that helps fuel our expansion and growth.

But more than this, our growth means more opportunities to uplift the lives of communities.

DIGITAL TRANSFORMATION
Since the onset of COVID-19, SM has reinvented ways it can bring its products and services closer to customers. We are committed to deliver excellent customer experience by combining the online shopping experience with our very own brand of service in our brick and mortar spaces. Our enhanced digital platforms allow our customers to use a multitude of devices and platforms which further complement our continued physical expansion.

One example is The SM Store’s Call to Deliver launched in 2020, a hybrid shopping platform that allows customers to get all their daily essentials from their chosen SM Store branch with the help of a personal shopper.

In 2021, Call to Deliver accounted for 10% of total non-grocery sales last year. We expect this share to shift to foot traffic in our stores as alert levels are relaxed further.

For the younger set who are savvy and comfortable shopping online, there is SM Retail’s ShopSM where they can shop for fashion, beauty and personal care essentials from the SM Store on an online shopping portal.

For our food business, SM Markets Online provides a one-stop grocery shopping platform to customers in Metro Manila, Cebu, Davao and other key cities in Luzon and Visayas. The platform offers an assortment of wet and dry market goods as well as offerings from house brand SM Bonus. SM Markets Online is also available through the ShopSM App.

BDO for its part continues to invest in digital infrastructure to make services more accessible, easier to use and operationally efficient. It launched BDO Pay, the country’s first bank-backed mobile wallet.

Our logistics arm, 2GO Group, continued to modernize its fleet and systems to meet future customer demands and help with the revival of tourism. Our other logistics company Airspeed started its digital transformation even before the pandemic by launching several services to help micro, small and medium entrepreneurs and global Filipinos.

We will continue to invest in online technology as we see e-commerce growing even more long-term. As we keep adapting to our customers’ preferences, we will combine our strengths in both the physical and online spaces and innovate further into the future.

SUSTAINABLE TOGETHER
As an advocate for sustainability, we made a strong commitment with our recent investment in Philippine Geothermal Production Co., Inc. (PGPC). The acquisition of PGPC, which operates the Tiwi and Mak-Ban steam fields, will boost our sustainable portfolio through an investment in renewable energy production.

BDO recently issued its maiden Blue Bond amounting to $100 million, through an investment from the International Finance Corp. (IFC), which will support financing for projects that help prevent marine pollution and preserve clean water resources, while supporting the country’s climate goals.

This is a milestone for BDO, being the first private sector issuance in Southeast Asia to issue a Blue Bond. The issuance reinforces the bank’s commitment to sustainable finance, particularly in critical areas such as water conservation, wastewater treatment, plastic recycling, sustainable tourism, fisheries and sustainable seafood processing, among others.

This year also marks our second year of reporting under more stringent International Integrated Reporting Council (IIRC) guidelines. We have disclosed additional information according to the Taskforce on Climate Related Financial Disclosures (TCFD) framework, which lays out our approach and high-level roadmap relating to Climate Change.

Going forward, we recognize that protecting our environment is one of the biggest challenges we will face.

We stepped up our climate action program and together with SM Prime and NEO, a part of portfolio investments, we signed on as supporters of TCFD in 2021. We join more than 3,000 supporters worldwide to make clear our unequivocal support for private sector action, transparency in our own programs and our partnership toward common needs and goals.

SM Prime continues to lead in disaster resilience planning across all of its developments particularly as a partner in UN ARISE and by dedicating 10% of our capital expenditures to disaster resilient designs and features.

SM Prime also made one of the boldest announcements related to energy usage in the country to date, committing that 50% of their energy will be provided by renewable sources by end-2022.

Through our various businesses, we have also introduced the SM Green Movement that aims to improve the quality of life of communities through priority sustainability solutions to promote a green planet, green living and a green culture.

We continue on firmly with our journey of expansion and growth based on a long-term, sustainable approach to our environment while integrating technology into our businesses. Our vision remains, despite the uncertainties ahead, to build an ecosystem of sustainable businesses that are catalysts for responsible development to serve our communities better.

 

Frederic C. Dybuncio is the president and chief executive officer of SM Investments Corp. He is leading the company’s expansion and growth via landmark deals to diversify its portfolio into high growth sectors. Prior to this post, he was a career banker, spending over 20 years with JPMorgan Chase and its predecessor institutions.