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Singapore has high levels of Government debt as reported in the CIA Public Debt Factbook. Do we have enough assets to cover our liabilities?



Yes, our assets are much larger than our liabilities. There is no net Government debt. Singapore is in fact a net creditor country, not a debtor country.

This is why international credit rating agencies give the Singapore Government the highest short and long-term credit ratings of AAA.

Our top credit ratings reflect the following:

a. a. Majority of the Singapore Government borrowings are for non-spending purposes. . Under the Government Securities Act, the Singapore Government cannot spend the monies raised from Singapore Government Securities (SGS), Special Singapore Government Securities (SSGS), Singapore Savings Bonds (SSB), and Reserves Management Government Securities (RMGS). SGS are issued to develop the domestic debt market and SSGS are bonds issued to the Central Provident Fund (CPF) Board with full Government guarantee. SSB are issued to provide individual investors with a long-term saving option. RMGS are issued to the Monetary Authority of Singapore (MAS) for the sole purpose of facilitating the transfer of Official Foreign Reserves (OFR) not needed by MAS, to the Government for longer-term management by GIC.

b. All borrowing proceeds from SGS, SSGS, SSB, and RMGS are therefore invested. The investment returns are more than sufficient to cover the debt servicing costs.

c. Only a small proportion of Government borrowings is for spending purposes, under the Significant Infrastructure Government Loan Act (SINGA). Under SINGA, the Government borrows to finance and capitalise nationally significant infrastructure, and there are strict safeguards under the SINGA to ensure prudence in borrowing.

d. The Singapore Government has a strong balance sheet that has assets well in excess of its liabilities. This is why it is able to earn significant investment income on its net assets (see question on "Is our CPF money safe? ").

A key principle underlying Singapores long-term budgetary objectives is to maintain a balanced budget over the course of a term of Government. This is a prudent approach to fiscal policy that some other countries are seeking to adopt.

Looking only at the liabilities (i.e. debts) alone does not discriminate between two countries with the same level of debt but with very different levels of assets.

More details of Singapore Government Borrowings are found here .

*Refers to borrowings through the Government Securities Act.

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