Inside the ornately vaulted church beside Manila Bay, the
children could be forgiven their fidgeting. Sunday mass was ending
and they were already thinking of the food and fun to come.
At last, the mass came to an end, and the 200 or so worshippers
dutifully filed out of the Shrine of Jesus, the Way, the Truth and
the Life — to head to the mammoth SM Mall of Asia just a few
minutes’ walk away. The 19.5-hectare temple to shopping, dining,
and entertainment, which also hosts a 1,500-seat Dell call center,
is owned and operated by SM Investments, the same company
that built and donated the church to the Archdiocese of Manila.
Among the worshippers is Felisa Domingo, 54, who attended
the 10:30 a.m. mass because she needed to visit the mall to
exchange U.S. dollars for pesos and buy school supplies for her
two grandchildren. Their parents, Domingo’s son and daughterin-
law, are medical workers in Saudi Arabia. SM’s foreign
exchange centers offer the best rates, she explains, and everything
else is there. The kids will buy school supplies at SM
Department Store, eat lunch at Jollibee, a homegrown burger
chain that leases space at the mall, go skating at the Olympicsized
ice rink, and perhaps see Harry Potter on an eight-story
IMAX screen if they are not too tired.
Only in the Philippines, as the locals would say. But it makes
perfect sense in this overwhelmingly Roman Catholic country for
a place of worship to be just a stone’s throw away from a church
of commerce. Flush with record remittances of more than US$1
billion a month from some eight million Filipinos abroad, the
economy is seeing a resurgence on the back of spending by consumers
like Mrs. Domingo. Helped by a period of relative fiscal
and political stability, GDP growth in the first half of 2007 topped
7 percent, the fastest expansion in three decades. The rise in personal
consumption in those six months reached 6 percent.
Consumer-oriented firms are reporting stellar results. Profits
are growing fast at companies ranging from Jollibee to dominant
telecom provider PLDT and property developer Ayala
Land. But it is SM Investments that looks like the best-placed
consumer play — and also the most vulnerable. What began as a
humble shoe store in 1948 (SM stands for “Shoe Mart”) has
become a conglomerate built in part around the vision of serving
overseas workers and their families at home.
Spending by overseas workers and their dependents now
accounts for half of all sales in the company’s 29 shopping malls.
SM’s banking arm, Banco de Oro-EPCI, the country’s secondlargest
lender by assets, has a global network of remittance centers
that has about a quarter share of the US$14 billion business.
These centers are being tapped to sell mortgages and service
payments on SM-built homes in property projects connected to
the malls, which are hugely attractive in the mall-crazy Philippines.
The success of the strategy is allowing SM to branch out
to related sectors like tourism and BPO (business process outsourcing),
two of the country’s sunrise industries.