SM Investments Corp. (SMIC), the conglomerate controlled by the Philippines’ wealthiest family, is pushing ahead with a multi-billion-dollar reclamation project despite geopolitical headwinds in the Middle East, even as its banking unit opts for a “wait-and-see” approach on liquidating assets seized from embattled tycoon Dennis Uy.

In an interview on the sidelines of the annual stockholders’ meeting of SMIC last week, Hans Sy, who chairs SM Prime Holdings Inc. and China Banking Corp., said the group will not hit the brakes on its $3 billion SM Prime 360 project in Manila Bay.

Sy described the current global volatility as a typical, if prolonged, phase of the economic cycle. The conglomerate intends to be fully positioned for the eventual upturn by completing construction during the lull.

“The economic cycle goes up and down, up and down. That’s how it is. Right now, it’s down, but it will go up again someday. By that time, we should already be finished (with the project),” Sy told reporters.
Sy noted that, “It’s usually about a three- to four-year cycle. But this time, given the current situation, we still don’t know when the war will end. So, the downside may last a bit longer…This actually validates why our father [the late founder Henry Sy Sr.] has always been so conservative in running the business.”

That same financial cushion is dictating Chinabank’s strategy regarding foreclosed assets linked to Uy’s Udenna Group. Despite receiving significant inbound interest from potential suitors, the lender is in no rush to offload high-value holdings, which include the stalled Emerald Bay casino resort in Mactan, Cebu, and a 14-hectare logistics site in Taguig City.

The Taguig property, originally acquired by Chelsea Logistics for ₱800 million in 2019, was foreclosed by Chinabank at a valuation of approximately ₱1.63 billion after construction stalled during the pandemic.

Similarly, the 12.6-hectare Emerald Bay site was seized after PH Resorts Group Holdings Inc. failed to complete the beachfront development and subsequently lost its provisional gaming license.

Sy emphasized that Chinabank is under no pressure to conduct a fire sale, noting the bank has already made the necessary provisions and acquired the assets at levels that remain comfortable for its books. He signaled that the bank would wait for valuations to stabilize before initiating a formal exit.

“We’re going to sell it,” said Sy, but noted that “Right now, the timing is not very good. As I said, there’s no need to rush. We are financially very stable. This was also part of the provision before. So, we’ll just wait for a while.”

The delay in the Mactan auction has left prospective buyers like AppleOne Group Inc. on the sidelines. AppleOne, which owns a two-hectare adjacent lot, had previously been in advanced negotiations with Uy in 2023.

Leif Bajarias, AppleOne executive vice president for finance and operations, noted that while prior talks collapsed over pricing and liability complexities, the firm remains keen on the site’s potential.

Valuations for the Mactan land have surged despite the project's troubled history. Recent appraisals for adjacent land reached ₱97,000 per square meter, valuing the Emerald Bay footprint at more than ₱12 billion.

Bajarias estimated the current market rate could be as high as ₱110,000 per square meter, bringing the land value to ₱13.86 billion, excluding the existing structures. For now, the SM Group appears content to let those valuations simmer.