Minister Assures Stability as Corporate and Household Debt Remains Under Control
Singapore’s debt situation remains manageable, with individual bankruptcies and corporate winding-up cases still below pre-pandemic levels, said Minister of State for Trade and Industry Alvin Tan in Parliament on Feb 7.
Bankruptcy and Corporate Insolvency Trends
Responding to concerns raised by MP Yip Hon Weng regarding the 18-year high in bankruptcy applications and increased corporate insolvencies in 2023, Tan clarified that not all applications lead to bankruptcy orders. He emphasized that the number of actual bankruptcy cases has remained stable and below pre-Covid levels.
Similarly, while corporate winding-up applications increased in 2023, the number of companies actually liquidated was lower than before the pandemic.
Impact of Interest Rates and Economic Challenges
Singapore’s macroeconomic and financial environment has been challenging, with global interest rates surging, pushing domestic borrowing costs higher. However, Tan reassured Parliament that most businesses and households have continued servicing their loans, showing resilience against financial pressures.
Despite rising bankruptcy filings, there has been no significant uptick in non-performing loans from banks. Monetary Authority of Singapore (MAS) stress tests indicate that corporates and household borrowers have adequate financial buffers to withstand economic shocks.
Outlook for 2024
With economic uncertainties ahead, businesses and workers remain cautious about Singapore’s financial landscape. The government continues to monitor debt levels closely while ensuring adequate support measures for both individuals and businesses navigating financial challenges.
