Sy-led SM Investments Corp. (SMIC) is shrugging off geopolitical tensions in the Middle East as a manageable disruption, betting that its diversified consumer-driven portfolio and disciplined capital management will shield it from global volatility.

Amando M. Tetangco Jr., SMIC chairman, said the Southeast Asian giant, which holds dominant positions in Philippine retail, banking, and real estate, is leaning on a strategy of pre-emptive liquidity and operational flexibility to navigate a new normal of recurring market shocks.

Tetangco, former governor of the Bangko Sentral ng Pilipinas, said the group is built to withstand cycles of stress rather than merely react to them.

“Our approach rests on three simple factors that have guided us through past disruptions,” Tetangco told shareholders during SMIC’s annual meeting, emphasizing that the company maintains a conservative balance sheet with manageable debt levels and sufficient liquidity.

This positioning, Tetangco said allows the conglomerate to maintain a “buffer” to act even when credit conditions tighten globally.

The group's resilience is anchored in its sprawling ecosystem, which includes BDO Unibank Inc., the country’s largest lender, and SM Prime Holdings Inc., one of the region’s biggest integrated property developers.

He said this diversification acts as a natural hedge, cushioning the group when specific sectors face headwinds.

Tetangco added that SMIC prioritizes securing domestic and international capital well ahead of any actual requirement, ensuring the firm is never forced to raise funds in the middle of a crisis.

“Today’s environment is less about temporary shocks and more about recurring volatility,” Tetangco said. “Volatility is now a feature of the operating environment. This means staying liquid, pacing investments carefully, and keeping enough flexibility to act when opportunities arise.”

The chairman noted that SMIC’s strategy often involves counter-cyclical investing, allowing the firm to deploy capital when market conditions are weak and assets are attractively priced.

He pointed to the company’s growing energy portfolio as a prime example of this discipline. By expanding solar capacity across its nationwide network of malls, the group is actively reducing its sensitivity to the wild swings of global oil and energy prices.

Tim Daniels, SMIC head of investor relations and sustainability, echoed this sentiment, stating that the company has reverted to the “operating principles” that carried it through the pandemic and previous bouts of high inflation.

Daniels explained that the focus remains on merchandising and format flexibility to meet Philippine consumer needs at every price point, regardless of the macroeconomic backdrop.

“We know how to handle these situations,” Daniels said. “We will do our best to keep 2026 a year that can handle the things that come against us. We remain cautiously but positively optimistic.”