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Did the Government borrow $22 billion to fund COVID-19 measures?



There are online reports alleging that the Government had borrowed $22 billion to fund the 2020 Budget measures to address the COVID-19 pandemic. This is inaccurate.

The $22 billion loan capital mentioned in https://www.mof.gov.sg/newsroom/parliamentary-replies/updated-budget-deficit-forecast-for-fy-2020-2021-after-budget-and-supplementary-budget-announcements on 4 Jun 2020 to NCMP Leon Pereras Parliamentary Question is not a borrowing by Government to finance its budget.

On the contrary, the Government has set aside the $22 billion loan capital to provide financing support to companies, similar to measures taken during the Global Financial Crisis and during this crisis by other international governments.

Banks can tap on the Governments loan capital, if they need to supplement their own capital to provide loans to companies under the financing schemes launched, such as the Temporary Bridging Loan programme.

Disbursement of the loan capital by the Government is not a fiscal expenditure, as it is expected to be repaid. We have separately set aside a budget to meet the Government's share of the risk for loans that may not be fully repaid.

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