SM Investments Corp., billionaire Henry Sy’s holding company, said sales at its malls and stores will grow at least 10 percent this quarter as oil prices decline and workers overseas send more money home.

‘The situation isn’t as bad as what most think,’ SM vice chairman Teresita Sy said.

‘Retail is still doing well and it’s driven by remittances, lower gasoline and the Filipino tradition of Christmas gift giving.’

SM Prime Holdings Inc., the group’s mall operator, said sales grew 24 percent in the first week of December despite the economic crunch.

‘December is a very important month for us because sales during the period account for 33 percent of total sales,’ senior vice president Jorge Mendiola said without citing figures.

He said the strong performance was due to better product selection in the group’s department stores, adding ‘The assortment is now a lot better.’

He also credited the higher remittances from Filipinos abroad, which allowed their families here to spend more money in SM’s malls.

‘Now that oil prices have dropped and the rice crisis is over, people are starting to buy again,’ Mendiola said. 
 
SM owns the biggest department store, grocery and shopping mall operator in the Philippines, whose economy is poised to slow for the first time in three years as the world sinks into recession.

The company lost 45 percent of its value this year, tracking a 46¬percent slump in the Philippine Stock. Exchange Index on speculation it’s among those that will suffer most from a slowdown.

The government last month cut its 2008 growth target a fifth time this year to a range of 4.1 percent to 4.8 percent. The country’s economy last year expanded by 7.2 percent, the fastest expansion in three decades, partly on record remittances. 
 
Growth may slow to an eight year low in 2009, easing to a range of 3. 7 percent and 4.7 percent as a global recession erodes exports, the government said.

Money sent home by the more than eight million Filipinos working abroad constitutes at least 10 percent of the economy. Remittances grew 17 percent to US$ 12.3 billion in the first nine months of 2008 from a year earlier, helping sustain consumer spending.

The central bank last week said growth in remittances was likely to slow next year, but the amount probably would not fall below the level in 2008.

Sales at SM’s department stores should be growing by 20 percent this month, the same rate as in October and November, Mendiola said.

‘Sometimes we get baffled, but many consumers are looking for value propositions and they are getting it from our stores,’ Mendiola said.

‘The decline in gasoline prices is also helping.’ 
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Global oil prices have slumped 57 percent this quarter, forcing local gasoline retailers such as Petron Corp. to cut pump prices.

Oil was at US$ 42.26 a barrel earlier Wednesday, compared with a record US$ 145.29 in July.

‘So far we are still generating double-digit growth in rentals,’ Jeffrey Lim, SM Prime’s chief financial officer, said.

‘Part of our rental income is linked to sales of our tenants so that’s also an indication of how they are doing.’

SM Prime’s 31 shopping malls and the group’s 93 grocers and department stores helped SM Investments offset weaker bank earnings and post a 14-percent growth in profit to P9.6 billion in the first nine months this year.