Manila Philippines -- A well known planner Jun Palafox said that there is a Metro Manila disease that he calls the state of being “over malled.” Traffic in Metro Manila is affected by this malady. The Honorable Francis Tolentino, Chairman, Metro Manila Development Authority (MMDA) agrees with the Palafox assessment. More than twenty years ago, Thailand suffered the same disease and experienced the dire effect of the mall glut. A large number of malls observers noted were “nilalangaw” (swarmed over by flies). What do you think follows after a heap of mass that is attraction to throngs of flies? You will find maggots breeding there.
A member of the SM Shoemart leadership refutes this, as Ms. Cynthia Patag shares the article of Philip Jr Lustre opinion writer of the Philippine Daily Inquirer and freelance pundit:
We had the opportunity to have some freewheeling discussions with Annie Garcia, president of SM Supermalls inc., and her business executives in the last fellowship meeting of the Thursday Club. So many issues had come out in our brief conversation. The following summarizes our discussions:
POINT ONE: SM North City, the first to be built among the existing 50 local and 10 overseas malls, remains the biggest income earner for SM Supermalls, beating Megamall and Mall of Asia (MoA), the two largest SM mall complexes. Mr. Bien Mateo, one of the vice presidents for operations, conceded that it could be surprising because Megamall and MoA are crowd drawers because of their gigantic sizes.
But since SM North is the original mall (it was built 30 years ago), it still draws big crowds. In fact, the rent income (rent in SM North City is bigger than the other malls) has increased over the years unlike the two other malls. The two other malls have the potentials to overtake SM North City, but that remains to be seen, Mr. Bien said. Meanwhile, SM North City is slated to expand, as it plans to put a new structure over the space previously occupied by the Supermall building. Also, SM plans to develop the adjacent two hectare land there.
It was also astonishing, according to Mr. Bien, for SM North City to remain its top income earner despite the stiff competition of the Ayala-owned Trinoma mall situated just in front of SM North. A factor could be the fact that the MRT-3 starts right on the SM North’s doorstep. The question now is the move to transfer the MRT-3 North Avenue station in front of Trinoma. But this is legal issue, which is already submitted to the court for litigation.
POINT TWO: SM Supermalls Inc. president Annie Garcia does not believe that the Philippines is “overmalled,” or has an excess of malls. On the contrary, the demand for more malls rises as the national economy improves. A higher growth rate is translated into higher sales for the malls. Hence, the demand exists and SM has to respond to the demand.
The SM Shoemart pride for SM City North Ave. is a bit ticklish tale - to say the least. First, the mall was built on property that was not supposed to be acquired by private owners since it was government owned. By the action of SM’s benefactor, the late President Ferdinand E. Marcos, SM won the battle to construct upon public domain measuring about 8 to 16 hectares – bigger than the 7-hectare Quezon City Memorial Circle (QCMC) or the 13-hectare core of the Makati Central Business District (CBD).
Second, it was allegedly the target of a people power uprising against the regime of Madam Corazon Aquino that will partly be led by a religious organization based in Quezon City. The supposed plan was for the religious group to take over SM North and grab everything they can take in the mall as reward for their participation in the uprising.
The entire uprising plot fizzled away but surprisingly, SM Shoemart was in no forgiving mood: It hired the members of the religious organization so that in the future, they would not be participating in any take-over attempts against any mall owned by SM Shoemart.
Furthermore, since the religious workers are under strict instructions never to engage in any form of unionism, SM Shoemart will be free from any conflicts and abrasive issues with its labor force. The two moves of SM Shoemart can be considered real master strokes.
However, their decision to expand geometrically and even encroach into areas where the members of the community and small entrepreneurs vehemently resist the development of malls, will be the very downfall of the company.
Despite the decision of the SM conglomerate to expand into gambling, aggressive banking, maritime, port-marina development, condominium and housing development, among many other diverse businesses the company has nowhere to go but down.
By the mid 2000s, the SM Malls were posting deposits of more or less Two Billion Philippine Pesos (Php2,000,000,000.00) each and every month to Banco De Oro – a small bank purchased by the conglomerate at a meager price from its original owners, or around the total sum of Twenty Four Billion Philippine Pesos (Php24,000,000,000.00) a year. That would be equivalent to One Half Billion United States Dollars (USD500,000,000) per year.
The company pays a horde of certified public accountants to certify its income is such and such and files the same with the Philippines’ Bureau of Internal Revenue (BIR) with a pittance sum as corresponding taxes.
One of the accountants of Mr. Sy grew old just adjusting his returns for the last twenty plus years, but the same accountant is now president of a few business organizations like a large apparel company and his accounting firm has acquired its own building along Aguirre St., BF Homes, Paranaque City, among many other properties in the Philippines and in the United States.
Aguirre Avenue in BF Homes is the scene of an untold number of illegal drug transactions, bukas kotse crimes, murders and many other heinous acts. One wonders why a very wealthy accounting company would want to be in that neighborhood?
Aguirre Avenue. Photo from: www.bfhomes.net
The other accountants and loyal servants of Mr. Sy cannot be laughed at for doing the dirty work for their employer. They have bigger and better buildings as well as residential palaces, various units in condominium towers, employ more or less twenty helpers and no less than five to six chauffeurs each and have trust funds for their children and grandchildren nesting safely in banks – one of which is of course BDO.
Since its more profitable years up to this time, notwithstanding that SM Shoemart is also publicly listed and is earning from the Philippine Stock Exchange as well as in other trading centers where it is also listed, the accumulated SM Shoemart income will amount to slightly over Seven Billion United States Dollars (USD7,000,000,000.00). However, Forbes List describes the patriarch of SM Shoemart to be worth Twelve Billion and Seven Hundred Million United States Dollars (USD12,700,000.00). That gives a difference of nearly Five Billion United States Dollars (USD5,000,000,000.00).
Whatever accounting the SM Shoemart and its financial backers make, to include the merging of locally and externally sourced income for the conglomerate – including the huge pay-outs for entering into big ticket corporate mergers and ventures such as the one with other Macau casino organizations in the Belle Grande Manila Bay gambling-entertainment complex (USD550,000,000), the Nasugbu Port project, there is a very big gap to fill up the claim of USD12.7 Billion net worth.
According to Malaysian sources, SM Shoemart’s Sy group is linked to another chinese Mr. Willy “Ocier” who together with allies in the most powerful bloc inside the Aquino regime – the (Presidential) First Family – took away the business of Malaysia’s Berjaya Group from under the very nose of Berjaya’s Malay-Chinese owners.
Among many others, the scandal brought about by the allegedly illegal bumping off of Berjaya Group from the Philippine Lotto system, is one of the suspect reasons why the Aquino family-supported erstwhile lady Chair of the Philippine Charity Sweepstakes Office (PCSO) was kicked out of the agency. Mr. Aquino, after all, is personally very close with the Prime Minister Datuk Najib Razak of Malaysia as Datuk Tungku Razak the elder Malaysian statesman father of PM Najib, was close to Mr. Aquino’s father, the late Senator Benigno S. Aquino, Jr.
The Malaysians disclosed that SM Shoemart’s Sy Group and the “Ocier” business organization are linked together in many respects. Among those enterprises that are only known publicly are the elite, luxury housing projects in Tagaytay City and several other businesses including gold or mineral extraction (mining) ventures.
Local quarters say that Willy “Ocier” was a fixture under the regime of former President Joseph Estrada. His group operated the online Bingo that was granted a franchise by the Estrada regime.
Whatever the source of Sy’s wealth aside from the vaunted “rags to riches” and “hard work and industry” claim of the SM Shoemart empire and what could the group be thinking of by kicking out the Malaysians from Philippine Lotto as well as getting in the same bed with sleek operators that worked the gambling scene and the underworld realm of shady activities and insider stock trading (Belle Grande’s stock is now one of the fastest rising in the Philippine Stock Exchange), is for nosy quarters to find out.
The crux of the matter is that SM Shoemart, that claims it is stable and has not “over malled” the Philippines, is simply doing just that – building and building up to a mall glut from where Thai mall developers drowned and could not get up from.
One of Henry Sy, Sr.'s fellow sly operator, another Willy, builds malls just to engage in highly illegal human trafficking. This man might not be far from the recent sky high malls in Divisoria-Binondo area. For sure, you will find too many foreign faces manning stores in those malls like in the past. Those foreigners sell everything imported and do not know a single word of English or Filipino. How do they manage to get permits to own stores? That's part of the trillion dollar question.
SM Shoemart now has more than one kind of mall store: Save More Supermarket, SM HyperMarket and the SM Shoemart Mall, SM Super Mall (Mega Mall) and SM Regional Mall (Mall of Asia), SM The Podium.
In Cavite alone, there are a string of SM Malls and with Ms. Vilma Santos at the helm in Batangas Province, the SM Shoemart has finally gotten the nod to invade “no mall build zone” Batangas that somewhat irrationally and whimsically just traditionally hates chinese businessmen encroaching into their turf.
The Ayalas are still hurting over the coup d’etat of SM Shoemart when their chinese rivals “bought” from Taguig City the real estate Ayala group donated to the local government for the purpose of building a park for the people of Taguig. SM Shoemart built a park indeed but over and above a large mall that they designed for high class shoppers called SM Aura. Anyone who looks poor enough to be categorized a domestic help, certainly does not deserve to enjoy the perks of a park at that part of Taguig City.
SM Shoemart, like its foreign mall owner counterparts, keep buying off the small competition. It acquired the Save More and MACRO stores and is slated to buy off others.
One of the biggest issues that will trouble SM Shoemart in the future is theft. In many provincial areas, a lot of property owners are crying “land grabbers” against SM Shoemart. A very insignificant business group in the unknown and obscure minority, are shouting theft of their intellectual property rights at SM Shoemart for the illegal, unauthorized continued use of the name BONUS for decades without any compensation. SM Shoemart is probably just feeling smug at people like these that it feels it can always afford to rob. After all, they're small fry and shit compared to the Henry Sy, Sr. of Forbes List fame.
With all the pride of SM Shoemart for its achievements, it certainly does not look like it will rest on its laurels. The company doggedly goes on to build and build, from houses to condos, malls to giant pantheons of their super light industry mentality of buy and sell, buy and sell – without contributing significantly through heavy industries to the development of their host country they chose to settle in after setting themselves loose from their homeland.
On its path to greatness, the SM Shoemart giant company killed hundreds of people it trapped inside SM Riverbanks complex at Marikina City when it closed the mall down when tropical storm Ondoy floods started seeping inside the structure. The reason for the complete lockdown was to prevent looters from being able to steal any of the mall’s goods as if everything within reach was as expensive or pricier than gold. As a result of this i-a-thief-suspect-others-as-thief mindset, many had died on that day alone. En route to hospitals or back at home, some of the other victims also never survived. That's SM Shoemart tender loving care for you.
SM has had to close many other malls such as the SM Rosario, Pangasinan for fear of the repetition of the SM Riverbanks Marikina tragedy. This was possibly the same story for closing down another overcrowding mall unit anyhow in the Daang Hari area, in Cavite.
The SM Shoemart patriarch is now dying. Inside sources said that when the old man set aside a large sum of money for trust in a non-profit company, the eldest daughter violently raged against father and threw all caution and manners aside to stake a claim to the SM conglomerate’s treasury of her part in the money her father and she and siblings supposedly earned over time.
Elder sister’s siblings went on to stake their claims on the rest of the empire.
Why in a non-profit slush fund? Why not in enterprise? Or in banking? High stakes investments? That is undoubtedly a trillion dollar question.
Eventually, instead of allowing the company to shatter into pieces, the patriarch and the other elders prevailed and set their foot down thereby making the decision to halve the monstrous SM organization into several companies. Thus was the eldest made to sit as head of SM Investments, one of the heirs given the CEO post of SM malls, the other of SM housing.
Around this time started the string of MARTILYO GANG and similar smash and grab robberies-in-band inside the SM Shoemart Malls. No particular major arrests have been made to this date. No heavy recovery of loots stolen - what happened to SM Shoemart security?
The Mall group drums up its very fierce and tender loving advocacy for what they call PWDs or persons with disability. If they cannot protect the publics and their store owners that are not with any handicap, how can they even more so protect the disabled, the elders, the women and children who may be weaker?
SM Mega Mall Robbery - Unsolved
Unsolved SM MOA Robbery
SM MOA Robbery Suspect Mark Kalama is a security guard! He is a selfie regular in SM MOA posing with criminal type companions
Still and all, there is only one Henry Sy, Sr. There is only one company and that company bears the culture and the spirit of the old man and him alone, not the new breed. The secrets of the money tree that Henry Sy, Sr. and his father found may be known to the children but can they manage those secrets successfully like their elders?
Lucio Tan, who held on to Marcos’ wealth for a long time, eventually had to give up most of the holdings over to a group that only very keen observers can accurately identify. Surely, they cannot simply be “Philip Morris and Co.” The also dying Eduardo Cojuangco, Jr. refuses to give up Marcos’ share in his stable.
Dying and no longer very able, when Henry Sy, Sr. divests, or is divested (is this the reason for the billion dollar slush fund), how will the SM Shoemart mall chain survive? Perhaps it will, it will among the flies surrounding it and maggots inside it.
Does it really take too much shrewdness, cleverness and very ruthless policies to keep the stall owners, suppliers, sourcing entities, service providers toeing the line even if they are always at the losing end? Will the new care takers be able to do what Henry Sy, Sr. and his son(s) and daughter were able to do and keep everything together?
Won’t the mall glut overtake the divesters and just make the Sy family fall altogether even with a brand new gambling empire, Banco De Oro, China Bank (originally the heirloom bank of Chiang Kai Shek the Founding Father of Taiwan and man Friday Dee) and housing business to boot?
In the beginning, the SM Shoemart patriarch, his lieutenants and children, should have made the right investments, made the right and not the stupidest decisions, avoided delayed payment of suppliers, shied away from pompous and unprofitable useless over malling, took very good care never to kill hundreds of people just to stop looters, engaged in more development-oriented heavy industries, refrained from intellectual property theft, shunned illegal connections, stop bragging about their so so humanitarianism and charity when they cannot even pay off their debts to society and be really good citizen-entrepreneurs. In short, as the adage says, brother Chinese in the Philippines, don't just drown in material ambition or greed, get a life!
All in all, the SM Shoemart is a giant corporate regime that is in the throes of death. And sadly, dying will not be painless.
Header photo : from Forbes.com
In the photo, Mr. Henry Sy, Sr. attending religious ceremony (Catholic Mass) after completing the much disputed supposedly illegitimate SM Aura construction. In celebratione uilissima peccata mea.
Originally posted in: Rebus21 @ WP
