The Singapore Government has a strong balance sheet with no net debt. Our financial assets are well in excess of our debt. This net asset position is reflected in the net investment returns generated on our reserves, which is made available for Government spending via the Net Investment Returns Contribution. In addition, our strong balance sheet explains why Singapore receives the top credit rating of AAA from the three leading international credit-rating agencies (S&P, Moody’s, and Fitch).

Our top credit ratings reflect the following:

• Majority of the Singapore Government borrowings are for non-spending purposes. Under the Government Securities (Debt Market and Investment) Act 1992, the Singapore Government cannot spend the monies raised from Singapore Government Securities (SGS) (Market Development) and Treasury Bills (T-bills), Special Singapore Government Securities (SSGS), Singapore Savings Bonds (SSB), and Reserves Management Government Securities (RMGS). SGS (Market Development) and Treasury Bills (T-bills) 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.

• All SGS (Market Development), T-bills, SSGS, SSB, and RMGS borrowing proceeds are therefore invested. The investment returns are more than sufficient to cover the debt servicing costs.

• 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. SGS (Infrastructure) and Green SGS (Infrastructure) would be issued under the SINGA.

• A key principle underlying Singapore's 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.

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.

Find out more about Government borrowings.