Caution may define the macro mood, but SM Prime Holdings is penciling in a brighter 2026.
Sm Prime president Jeffrey Lim acknowledged recently that the drag of slower gross domestic product growth in 2025. The numbers, he conceded, have softened. The headlines have followed suit.
Yet beneath the topline gloom, the country’s consumption engine is still humming, said Lim, and SM Prime is positioning its malls to catch the rhythm.
“I know that we have seen slower GDP growth last year,” Lim said. “And some people expect that to still continue this year.”
But he quickly pivoted to cautious optimism, pointing to resilient household spending and a services sector that refuses to sit still.
Business process outsourcing revenues and overseas remittances continue to feed disposable incomes, while net income from foreign services adds ballast to the broader economy.
A key swing factor: public spending.
Government underspending clipped growth in 2025, but pronouncements to accelerate payments for completed infrastructure projects could reverse that drag. If disbursements pick up in the first half, Lim expects a corresponding lift in consumer activity.
While household spending growth slowed to 4.6 percent last year from 4.9 percent while government spending, despite the flood control controversy, still rose to 9.1 percent from 7.3 percent in 2024.
For malls, the story is no longer just foot traffic, its focus.
Today’s Filipino mallgoer is “more lifestyle-driven, brand-conscious, and very deliberate,” Lim observed. Translation: browse less, choose better. SM’s response has been to curate tenant mixes, introduce flagship concepts, and lean into experiential retail — dining, entertainment, and community spaces that turn errands into outings.
In an era of careful spending, relevance is the real currency in retail.
If services stay sturdy and infrastructure outlays finally hit the ground, SM Prime is betting that 2026 won’t just be brighter — it will be busier.
