Economy & business — Topics

20 Oct 2022

Progress of Digital Banks in Incorporating Innovation to Serve Customer Needs and Reach Underserved Segments

The digital banks have recently launched operations despite COVID-19 challenges, starting with limited products for selected segments and planning to scale as their capabilities grow.
The pandemic has not significantly hindered progress, as digital banks are leveraging ecosystems to pilot innovations for underserved groups like gig workers, though broader impact will take time.
MAS recommends that digital banks accelerate financial inclusion by continuing to tailor services to specific segments and encouraging competition that pushes existing banks to enhance their offerings.

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20 Oct 2022

Reasons for Government's Venture into Private Sector Space of Construction of Migrant Worker Dormitories

Seah Kian Peng raised concerns about the government's new migrant worker dormitories potentially crowding out private operators and questioned the reasons for government involvement in a private sector space.
Tan See Leng explained that the government's purpose is to drive innovation and improve public health resilience and liveability in migrant worker housing.
He clarified that the two government-built dormitories represent a small fraction of over 50 private-operated ones, ensuring no significant crowding out of private operators.
The government will continue to tender new dormitories based on workforce needs, maintaining private sector involvement.
Further details were referenced from a MOM launch event in October 2022.

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20 Oct 2022

Prevalence of Use of Cashless Payment Platforms and Number of Scams Reported

Tharman Shanmugaratnam reported that nearly 5.5 million bank accounts are registered with PayNow, and SGQR, launched in 2018, is the unified payment QR code standard accepted by over 90% of merchants in Singapore.
Usage of PayNow, including payments to merchants and businesses, reached S$46 billion in 2021, with SGQR facilitating the adoption of multiple payment schemes like PayNow, Dash, FavePay, and GrabPay.
The Singapore Police Force recorded only 20 reported scam cases involving fake QR codes or fraudulent Scan and Pay transactions from 2020 to the first half of 2022, indicating such scams are not prevalent.
Measures to prevent scams include MAS education initiatives like the MoneySENSE website and Seniors Go Digital programme, which teach safe e-payment practices and cyber risk awareness, alongside SGQR rules requiring merchant acquirers to educate merchants on fraud prevention.
MAS continues to work with industry and government agencies to review and enhance anti-scam measures for cashless payments, while emphasizing consumer vigilance to ensure payments go to intended merchants.

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20 Oct 2022

Affordability of Wheelchair-accessible Vehicular Services

The Ministry of Transport aims to ensure an inclusive transport system, noting that all public buses and trains, as well as many point-to-point and taxi services, are wheelchair-accessible.
Financial support is available through various schemes, including concessionary fares for public transport and subsidies for private transport services like taxis and dedicated vehicles for persons with disabilities.
The government provides a COE Grant Scheme for non-profit organisations to subsidize the cost of commercial vehicles used to transport elderly or disabled clients who cannot use public transport unassisted.

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20 Oct 2022

Performance of Relationship Managers in Bancassurance

The Prime Minister stated that financial institutions and representatives are regulated by the Financial Advisers Act and Insurance Act to ensure proper conduct, including fit-and-proper assessments, product knowledge exams, needs-based recommendations, and clear communication of risks and fees.
Financial institutions must investigate complaints and report misconduct to MAS, which can remediate weaknesses and take enforcement actions, including prohibition orders against errant representatives.
Clients can seek recourse through their financial institution or the independent Financial Industry Disputes Resolution Centre (FIDReC).
MAS collaborates with industry associations to promote fair dealing and strengthen sales and advisory standards, maintaining trust in the financial sector.

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20 Oct 2022

Requiring Home Owners to Sell HDB Flat if They Wish to Purchase Private Property and Vice Versa

Yip Hon Weng proposed requiring HDB flat owners to sell their flat before buying private property and vice versa.
The Ministry explained that HDB owners can buy private property after the Minimum Occupation Period but must pay Additional Buyer’s Stamp Duty if they retain their HDB flat.
Private property owners are already required to dispose of their property before buying an HDB flat to prioritize public housing for those without other properties.
Private property owners face a waiting period of 15 to 30 months before purchasing an HDB flat, depending on the type of flat and purchase date.
The government will continue monitoring housing market conditions to ensure affordable public housing for Singaporeans.

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20 Oct 2022

Decision on HDB Mortgage Loan Rate amidst Rising Interest Rate Environment

Ms Foo Mee Har asked whether HDB would raise its mortgage loan rate beyond 2.6% after December 2022, given rising interest rates from financial institutions.
Minister Desmond Lee explained that HDB's rate is pegged 0.10% above the CPF Ordinary Account rate to cover administrative costs.
The current rate of 2.6% will hold until 31 December 2022, with quarterly reviews aligned to CPF OA rate adjustments.

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20 Oct 2022

Steps to Take Following Consumption of Recalled Food Products

Joan Pereira asked what consumers should do after consuming recalled food and what recourse they have if they fall ill.
Grace Fu explained that SFA recalls non-compliant food products and advises consumers to stop consuming them.
Consumers who have eaten recalled products should monitor their health and seek medical advice if unwell.
Consumers should check with their points of purchase for refund and medical expense reimbursement policies.

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20 Oct 2022

Affordability of Executive Condominiums for HDB Upgraders

The Minister for National Development explained that the Executive Condominium (EC) scheme aims to provide affordable private housing for higher-income Singaporeans, with eligibility restrictions like a $16,000 income ceiling and a CPF grant of up to $30,000 for first-timer families to ensure affordability.
To moderate housing prices, the government has tightened financial measures, including lowering the total debt servicing ratio threshold to 55% and raising the interest rate floor for loan calculations to encourage prudence.
The government monitors market conditions and adjusts the supply of ECs through land sales programs based on factors like unsold stock and demand, ensuring the scheme remains relevant for housing needs.

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20 Oct 2022

Success Rate in Prevention of Scams Following Co-location of Bank Staff at Police's Anti-scam Centre

Since banks began co-locating staff with the Police's Anti-Scam Centre, over 5,400 scam reports involving bank transfers and withdrawals were received between July and September 2022, with more than 3,400 bank accounts frozen to disrupt scammers' operations and aid recovery.
The main cause for scams not being prevented is that scammers, often based overseas, transfer stolen funds quickly through multiple financial instruments and abroad, making detection and recovery difficult.
Despite efforts like real-time coordination and public education, it is not possible to stop every scam attempt due to the resources and tactics used by scammers.

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20 Oct 2022

Implication of Pound's Recent Decline on Government's Foreign Asset Holdings

Mr Saktiandi Supaat queried the proportion of Singapore's foreign assets exposed to UK gilts and pension-linked funds following the pound's decline and the UK's rising borrowing costs, and whether diversification of UK-linked assets is sufficient.
Deputy Prime Minister Lawrence Wong stated that the Government evaluates investment entities based on long-term overall portfolio performance, not short-term specific investments, and does not dictate individual investment decisions.
He confirmed that investment entities monitor the UK situation closely but manage risks through globally diversified portfolios across geographies, asset classes, and sectors, with more details available in annual reports.

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20 Oct 2022

Yardstick to Measure Success of ONE Pass Scheme

Mr Yip Hon Weng asked whether the Ministry will measure the success of the ONE Pass by looking at the profitability of firms hiring such talent, the ratio of Singaporean to foreign talent in top roles, and the increase in Singaporean employees.
Minister Tan See Leng acknowledged these indicators are relevant but noted the difficulty of isolating the impact of ONE Pass holders on individual company performance due to many other influencing factors.
The Minister emphasized that Singapore benefits more broadly from the networks and opportunities created by ONE Pass holders, and that monitoring should focus on macro-level economic competitiveness and local employment outcomes.
The government will continue to assess the scheme through both micro and macro indicators to ensure it benefits Singaporeans and the economy.
The approach balances company-level observations with a broader view of national economic growth and leadership opportunities for Singaporeans.

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20 Oct 2022

Rising Prices of Fresh Fish

Melvin Yong asked about the extent of fresh fish price increases over the past six months and whether the upward trend is expected to continue into 2023.
Grace Fu stated that fish and seafood prices rose by 4.7% on a seasonally-adjusted basis from February to August 2022, citing climate change, adverse weather, and higher feed and energy costs as key factors.
She noted Singapore’s heavy reliance on imported food and highlighted efforts to diversify food sources and develop local aquaculture to enhance resilience.
The government encouraged businesses to adopt continuity plans and consumers to be flexible with food choices to mitigate impacts.
No explicit forecast for 2023 was provided, but the response emphasized ongoing diversification and local production strategies.

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20 Oct 2022

Setting Total Debt Servicing Ratio Medium-term Interest Rate Floor at 4% Per Annum

MAS raised the medium-term interest rate floor to 4% for residential property loans based on assessments of future market interest rates, referencing the rise in the three-month compounded SORA and the historical average of mortgage rates in the 1990s and 2000s.
The rate floor ensures borrowers maintain prudential debt servicing ability, with financial institutions assessing affordability at the higher floor during low-rate periods and using the highest applicable rate during high-rate periods.
Market forward prices suggest SORA-based mortgage rates could rise further in 2023 before easing but remaining above the low levels seen in the past decade, prompting MAS to urge household caution on debt commitments.

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20 Oct 2022

International Development Association (Amendment) Bill

The Bill amends the International Development Association Act to require Parliament’s approval for every subscription to IDA, replacing the previous system of approving a cumulative cap, in response to IDA’s revised voting rights framework.
The government reaffirms Singapore’s commitment to contributing fairly to IDA while ensuring financial prudence, noting that Singapore has contributed to IDA replenishments since 2002 and plans to seek parliamentary approval for its next subscription in 2023.
Nominated Member Prof Hoon Hian Teck supports the Bill, highlighting how Singapore once benefited from World Bank loans and now contributes to help other countries achieve growth, emphasizing IDA’s role in financing infrastructure and overcoming geographical disadvantages for developing nations.

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20 Oct 2022

Goods and Services Tax (Amendment) Bill

The Goods and Services Tax (Amendment) Bill was introduced to amend the GST Act 1993 and make related changes to the 2021 GST Amendment Act.
The bill was presented by Senior Minister of State for Finance Mr Chee Hong Tat on behalf of the Deputy Prime Minister and Minister for Finance, with the President's recommendation signified.
The bill underwent its First Reading in Parliament and was scheduled for its Second Reading at the next available sitting.

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20 Oct 2022

Impact on Singapore of US-Imposed Restrictions on Sale of Semiconductor Products to China

The US semiconductor restrictions are not directly targeted at Singapore but could affect its industry due to the sector’s global and complex supply chains, with many local companies relying on US technology.
The Ministry is supporting the industry by promoting Singapore as a stable and trusted hub, strengthening business continuity plans, diversifying supply chains, and implementing strategies to anchor investments and develop talent.
While exact exposure levels are unclear, the government is closely monitoring the evolving situation and plans to use free trade agreements and diversification efforts to mitigate future geopolitical shocks.

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20 Oct 2022

Impact of Normalisation of Global Supply Chains on Singapore's Seaport

The Port of Singapore is currently operating at about 85% of its maximum handling capacity, with a buffer to handle short-term demand increases and future capacity expansion planned with the completion of Tuas Port.
The Minister noted that while global supply chain normalisation could bring uncertainties, the port’s competitiveness is maintained through strong tripartite partnerships, productivity improvements, and technology like autonomous vehicles to manage manpower needs.
Despite potential global economic slowdowns, the Ministry is prepared for both up and down cycles in shipping volumes, leveraging Singapore’s strategic role as a “catch-up” port to handle disruptions and sustain network effects.

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20 Oct 2022

Home Owners with Private Bank Loans Affected by Rise in Interest Rates and Risk of Foreclosures

Mr Alex Yam questioned the Prime Minister on the proportion of homeowners affected by rising interest rates and the risk of foreclosures.
Minister Alvin Tan stated that one-third of mortgage holders already face higher repayments, but household debt remains healthy with low non-performing loans and few foreclosures.
Stress tests by MAS indicate most households can manage higher rates and income loss, though highly leveraged households may struggle.
MAS and MND are collaborating to monitor the situation and provide debt restructuring options for those in difficulty.
Further enhancements to workflow processes between government agencies and financial institutions are being considered to address worsening mortgage rate scenarios.

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20 Oct 2022

Trend of Corporate Bad Debts due to Rising Interest Rates and Assistance for SMEs to Access Capital for Growth

The Minister of State reported that despite rising interest rates, corporate bad debts have not increased, with non-performing loans (NPLs) for the corporate sector and SMEs having fallen over the past year, and SME loan volumes remaining resilient.
The government assists SMEs in accessing capital through various credit schemes, including Enterprise Singapore's Enterprise Financing Scheme, and will continue to monitor developments and adjust measures as needed.
In response to supplementary questions, the Minister noted that most Singapore firms have healthy balance sheets and liquidity, and MAS stress tests indicate resilience to further interest rate increases, with the government ready to support promising companies facing insolvency through existing financing schemes and grants.

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