The inauguration on April 30 of SM City Naga, 450 km south of Manila, ran true to form. The blessing started on time, VIPs were in attendance, and the mall was 85-percent occupied by locators.

On May 1, the formal opening day to the public, roads leading to the mall heaved with vehicles and had to be closed because there was no more parking space. The same day, the weather bureau declared Signal No. 1 because of, not just one, but two, tropical depressions in the Bicol region.

Conspicuously absent on blessing and opening day was Henry Sy Sr., SM’s legendary founder and chairman of his holding company, SM Investments Corp.

His two sons, Hans, who builds the SM malls, and Herbert, who builds the SM supermarkets, managed to take the first Manila-Naga private flight on April 30. However, when the plane came back to fetch Henry Sr. and eldest child Tessie Sy, the CEO of his Banco de Oro Unibank, it was not allowed to take off again because the weather had worsened.

Tatang Henry had no reason to sulk though. Crowds thronged to SM City Naga, his 34th in 52 years, on the day the storm arrived, which flooded half of Camarines Sur province.

Why would Bicolanos brave stormy weather just to go malling? It was, to quote a cliché, to taste the SM mall experience. Though an ancient city (it was founded 1575), Naga has had no SM, until now.

Sy, 85, had perfected retailing into an art with such élan and style that a mall in a distant place like Naga (you should experience the rutted roads in 100 of the 400 km going to the CamSur capital from Manila) creates such a commanding presence one must be in it and experience the lifestyle change. His compelling rags-to-riches story has made Henry a folk hero of millions of Filipinos.

The SM retailing monolith is unstoppable. Henry Sr. sees explosive growth and does not seem to have heard of a recession that is sweeping through two-thirds of the globe.

“There is really nothing wrong with the economy,” notes his son, Hans Sy, the president of SM Prime. “Remittances remain big, at $16.5 billion. Consumption remains strong.”

It helps that the Philippines is no longer a poor country, but middle class, with per capita income of more than $2,000.

This year, SMIC has budgeted P31 billion in capital spending—P25 billion for its Philippine operations and P6 billion in China where it has three malls.

The three China malls—in Xiamen and Jinjang in southern China, and Chengdu in central China— were incorporated in 2007 into the SM group “to gain a foothold in China’s fast-growing economy and use this as platform for long-term growth outside the Philippines,” explains SMIC President Harley Sy.

Henry Sr.’s malls—the 33 in 2008 and the 34th in Naga, have a total floor area of nearly 5 million square meters. In 2008, SMIC chalked up record revenues of P147.5 billion, up 19.1 percent, and net profit of P14 billion, up 15.6 percent. This was in a down market, what Lance Gokongwei calls “a challenging environment.”

The P14 billion is certainly far better than Ayala Corp.’s P8.1 billion which is down 50.25 percent, and JG Summit’s P694 million loss, a turnaround from 2007’s P11.37 billion profit.

SMIC’s margins are healthy, 14.7 percent on operating income, and 9.5 percent on profits. Return on equity even improved, 13 percent in 2008 from 12 percent in 2007. With robust profits, SMIC ended up with more cash, P28.1 billion in 2008, higher than the P25.5 billion in 2007.

In terms of profits, SMIC makes more money from rentals of mall space, P6.4 billion than from merchandising or the selling of shoes, clothes, appliances and other things, P3.4 billion.

SMIC plans to open ten department stores—three in 2009 and seven in 2010 to bring the total to 43 in two years. Sixteen supermarkets will be opened in 2009—14 SaveMore (for people who buy for their daily needs) and two regular supermarkets, to bring the total number of supermarkets to 53, from the present 37—13 SaveMore and 24 supermarkets.

Four hypermarkets—the one-stop household shopping convenience—will be opened to bring their number to 17, from the present 13. The 14 Makro or wholesale outlets will be integrated as part of the hypermarket chain. Apparently, wholesale shopping thru membership is no longer cool.

Summing up, expansion plans for 2009 include the opening of two department stores, 16 supermarkets and five hypermarkets.

In addition to SM Naga, SM Prime is opening in 2009, SM City Rosario in Cavite, SM City Pamplona in Las Piñas, and the Sky Garden at SM City North Edsa.

By the end of the year, SM Prime will have 36 malls nationwide and three malls in China, with an estimated GFA, ground floor area, of 4.9 million square meters.