SM Investments Corp. on Wednesday has set aside P90 billion as capital expenditures this year the bulk of which will be carried out by shopping mall operator SM Prime Holdings Inc.
The proposed spending is 12 percent higher than last year’s P80 billion.
In residential development, SM Prime has 84 residential projects looking to launch 15,000 up to 20,000 residential units this year.
It is scheduled to open three new malls and expand in other malls in the Philippines this year, resulting to an additional 200,000 square meters of gross floor area. The new shopping malls are in Bataan, San Pedro in Laguna and Sto. Tomas in Batangas.
Around 10 percent of the proposed capex will be used for leisure developments, office buildings and convention centers.
The rest is set aside for SM Retail Inc., which also looks to expand its store network to 400 stores this year from food and specialty retail stores such as the Alfamart convenience chain. Alfamart will add 200 new stores this year.
“Opportunities for growth in the Philippines remain high. Our businesses are well-positioned and have clear strategies to participate this year,” Frederic C. DyBuncio, SMIC president and CEO said.
SMIC said the growth prospects is supported by more people gaining employment. A large chunk of the remittances from overseas Filipinos are channeled to families in the provinces.
Increasing connectivity and the level of talent also provide more impetus for expansion among business process outsourcing firms in these areas. BPO revenues are at par with OFW remittances in amounts estimated at over $30 billion.
“The majority of our expansion is focused on regions, especially in emerging regional centers outside of Metro Manila,” DyBuncio said.
SMIC has invested in related businesses in recent years as part of the strategy to participate in emerging high growth sectors as logistics and renewable energy generation.
“We are particularly optimistic about these opportunities. Our portfolio investments collectively contributed 11 percent of consolidated earnings last year and we expect this to increase over time,” DyBuncio said.
