SM Investments Corp. (SMIC) said its retail sales may slow this year as the damage to crops and livestock from the dry spell caused by the El Nino weather pattern cuts the incomes of consumers who rely on agriculture for their livelihood.

‘It’s a probability but we don’t know yet the extent of the damage to crops and consumer spending,’ SMIC vice president Cora Guidote said in a mobile phone text message. Retail sales may slow to between 7 percent and 8 percent this year compared with 9 percent in 2009, she said.

SMIC, the holding company of Philippine billionaire Henry Sy, owns the country’s biggest shopping mall operator and its biggest bank by assets.

Earlier, SMIC disclosed that the company will increase capital spending in 2010 by 62 percent to 40.6 billion, compared with the P25-billion budget set in 2009. The company will continue to focus on its five core sectors or anything that has synergies with the core businesses. At present, SMIC has five core units-malls, retail, banking, property and the newly added hotels and entertainment.

For 2010, SMIC has allotted the lion’s share of the budget amounting to P17.4 billion for its property business, which plans to build 14 residential condominiums as well as expand the Pico de Loro Cove resort in Batangas, among others.

About P12.1 billion will be spent on its mall unit which plans to launch five SM shopping centers in Luzon namely in Tarlac, Novaliches, Masinag in Rizal, as well as in Calamba and San Pablo in Laguna.