MANILA, Philippines - Sy-led SM Investments Corporation (SMIC) is expecting gains in their banking and retail arms with the establishment of the ASEAN single market which is targeted for 2015.
Speaking at a press conference held after the SMIC stockholders meeting on Thursday March 26, Jose Sio, executive vice president and CFO of SMIC said that an ASEAN single market will definitely open up certain sectors within SMIC
“From the banking side it will increase its capital base,” said Sio.
“On the property development we don’t see a huge change coming in because at present there are only major players within the Philippines. On the retail side we have coordinated with several of the foreign brands who will be opening up. So we just have to prepare,” he added.
The SM group had previously said they were looking to put up malls in Vietnam and Indonesia. However, so far their concentration has been in China, a market they are more familiar with.
SMIC’s shopping malls arm, SM Prime Holdings Inc. is planning to open SM Zibo and SM Tianjin, which will be its biggest mall to date and will span over 530,000 square meters in floor area.
ASEAN, which comprises of Brunei, Cambodia, Indonesia, Laos, Malaysia, Mayanmar, the Philippines, Singapore, Thailand and Vietnam, is a region of 600 million people in 10 countries. The group wants to establish a common market and manufacturing base so that it can better compete as a group with giant neighbours such as China and India in terms of trade and investments.
Once established, it will be easier for Philippine companies to put up subsidiaries or other branches in other countries in the region.
SMIC is a holding company with interests in shopping mall development and management, retail, real estate development, banking and tourism. It has become one of the largest conglomerates in the Philippines.
Analysts have said that ASEAN has achieved much in cutting tariff barriers to trade in goods, but still has a lot to do before the end-of-2015 target in opening up the services sector by removing non-tariff hurdles.
Speaking at the ASEAN’s annual summit on Wednesday April 24, Philippine president Benigno Aquino said that Southeast Asia's efforts to create a single market by 2015 are in their hardest phase owing to protectionist reflexes on sensitive sectors.
"They have finished with the easy parts but the accomplishments will not be as fast as in discussing the hard parts. When you reach that point, there can be some protectionist measures taken by each economy," Aquino said.
Challenges outlined by Aquino include a framework to open up the services sector such as banking, insurance, telecommunications and retail within ASEAN.
SMIC currently has representative offices in Hong Kong and Singapore. - Rappler.com