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Henry Sy Sr. is on a roll

Henry Sy Sr., 90, remains the undisputed richest Filipino.  His wealth is estimated by Forbes magazine at $14.5 billion.  My BizNewsAsia magazine reckons Tatang Henry’s wealth is $11 billion.  He is on a roll, with his businesses expanding at an unprecedented pace, thanks to robust consumer spending that now accounts for 71 percent of the economy which in turn is boosted by $25 billion or P1.15 trillion of annual remittances. 

This same P1.15 trillion can pay for twice the total annual payroll of two million government personnel.  This is a government that disappears after an hour of downpour, like what happened in Metro Manila from 6 p.m. to 7 p.m. Tuesday, Sept. 7.  Our government people are just not worth the money taxpayers pay them.  We can fire two-thirds of them and there won’t be any difference.  Government is absent nearly all the time in our lives, anyway, except when it comes to collecting taxes, 40 percent of which is routinely stolen.

Per BizNewsAsia, the billionaire Filipinos are: 1. Henry Sy $11 billion; 2. John Gokongwei Jr. $7.4 billion; 3. Iñigo Zobel $6 billion; 4. Ramon S. Ang $5 billion; 5. Jon Ramon Aboitiz family $4.5 billion; 6. Lucio Tan $4.4 billion; 7. Enrique Razon $3.9 billion; 8. George Ty $3.2 billion; 9. Andrew Tan $2.7 billion; 10. Jaime Zobel de Ayala family $2.5 billion;

11. Tony Tan Caktiong $2.5 billion; 12. David Consunji $2.1 billion; 13. Lucio Co $1.3 billion; 14.  Alfredo Yao $1.06 billion; 15. Oscar Lopez $1 billion; 16. Eduardo Cojuangco Jr. $1 billion; and 17. Manuel Villar $1 billion.

Henry Sy’s $11-billion wealth is based on the market capitalization of his holding company where he is chair emeritus, SM Investments Corp.—P710.7 billion.  He owns about 67 percent of that, P476.2 billion or $10.6 billion.  The stock price hit a high P974 a share on April 10, this year and has lost only 10  percent in value.

Tatang Henry is the Philippines’ biggest retailer (by end-2015, he would have 55 malls in the Philippines and six in China with an estimated combined gross floor area of 8.3 million square meters), the biggest banker (BDO and China Bank which, combined, have P2.34 trillion assets or 23 percent of the total resources of the commercial banking system, P1.9 trillion or 23.5 percent of the system; and loans of P1.43 trillion or 26.5  percent of the system); the most prolific and profitable condo developer (30 projects plus six expansion this year), and the leading mall developer.

BDO financed Lucio Tan’s $1-billion buyback of 49 percent of Philippine Airlines in 2014.  If Kapitan defaults on this loan, Henry Sy can end up owning not just PAL but also the crown jewels of LT’s businesses.

Sy opened the first Shoemart store in 1958. The group is now in five businesses—shopping malls, retail, banking, real estate, tourism, hotel and conventions.

About 73  percent of revenue comes from retail, 23 percent from property, and 4 percent from banks.  On net income basis, banks are the biggest moneymaker, 41 percent, followed closely by property, 38 percent, and retail, 21 percent.

Sy Sr. seems to have worked out his succession. Eldest child and daughter Teresita Sy-Coson, 64,  is chair of flagship BDO bank and vice chair of the holding company SMIC.  Eldest son Henry Jr., 61,  handles real estate and is chair of China Bank and of SM Prime, vice chair of SMIC, and president of National Grid Corp.  The other siblings each head an operating unit.

The group is on a roll.  Profits in 2014 amounted to P28.4 billion, up from P27.5 billion in 2013.

First half profit so far is P13.5 billion, up 9.6 percent.  At this growth rate, net income could reach a record P31 billion on revenues of P278 billion for the whole of 2015.

As of June 30, 2015, Sy’s SM Retail had 289 stores nationwide, namely: 51 SM Stores, 41 SM Supermarkets, 127 SaveMore stores, 43 SM Hypermarkets and 27 WalterMart stores.

For the rest of 2015, SM Prime will open four  new malls, located in SM Seaside City, Cebu; Sangandaan, Caloocan; and Cabanatuan, Nueva Ecija in the Philippines and Zibo in China, and complete the expansion of SM City Iloilo and SM City Lipa.

SM Megacenter Cabanatuan in Nueva Ecija was also re-launched last April 2015. By yearend, SM Prime will have 55 malls in the Philippines and six in China with an estimated combined gross floor area of 8.3 million square meters.

For 2015, SMDC plans to launch at least five new condominiums consisting of about 12,000–15,000 units in the cities of Taguig, Quezon, Mandaluyong, Tagaytay, Las Piñas, Parañaque, and Pasay at the Mall of Asia Complex.

The 347-room Conrad Hotel Manila in the Mall of Asia Complex in Pasay and Park Inn by Radison Clark in Pampanga are expected to open in the last quarter of 2015.   At end-2014, SM had four hotels and four convention centers.

For the rest of 2015, the retail group will be opening two SM Stores, three SM Supermarkets, 10 SaveMore, one SM Hypermarket and five WalterMart stores.

The group is aggressively expanding into resorts and mining as well as power distribution.

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Speaking of banks, Filipino expats should demand from their banks to lower the fee they charge for handling remittances to the Philippines.    Commercial banks charge among the most extortionate fees on remittances, from 10 percent to 12 percent, or about $20 for every $200, the average amount per remittance. The fee should only be 5 percent or $10 for every $200 remittance, according to the World Bank..

The World Bank is forcing all remitting countries in the world to lower their remittance fee—to about 5 percent of the amount remitted. The average cost of sending money to Southeast Asia is 7.92 percent.  The average to send money to China 10.49 percent, India 5.97 percent and to Mexico 4.48 percent.  China, India, Mexico and the Philippines are the world’s largest recipients of remittances.

 

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