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SINGAPORE – While Singapore’s bankruptcy filings reached an 18-year high in 2023, actual bankruptcy orders and corporate insolvencies were lower than the number of filings, and also below pre-COVID-19 levels.
This was pointed out in a reaction by Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and member of the Board of Directors of the Monetary Authority of Singapore (MAS), in Parliament.
There were 3,986 bankruptcy applications made by individuals or their creditors over unpaid debts of more than S$15,000 in 2023. Applications for companies to be compulsorily liquidated also peaked, hitting 273 in 2023.
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In response to a question from MP Yio Chu Kang Yip Hon Weng, Tan, speaking on behalf of Finance Minister and MAS Chairman Lawrence Wong, said: “It is vital to put the most recent bankruptcy statistics into perspective. In Singapore, higher in 2023, not all programs resulted in bankruptcy orders. The actual bankruptcy orders were fewer than the number of programs. The trend in bankruptcy orders has been largely robust in recent years and is also below pre-COVID levels.
Similarly, the actual number of company liquidations in 2023 is well below pre-COVID-19 levels.
Yip asked, “In view of individual bankruptcy programs that have reached their highest point in 18 years and the accumulation of corporate insolvencies in 2023, is this cause for fear for the government?”It also asked whether the backlog of insolvency was primarily due to difficulties in repaying existing debts, or whether it was also driven by an increased appetite for new businesses, and whether the government was making more plans to address this problem, such as expanding debt counselling. .
Tan added, “Bankruptcy applications rose amid the challenging macroeconomic and financial environment for corporates and individuals in recent years. The higher global interest rates environment also caused domestic interest rates to rise sharply.”
However, as many businesses and households as possible had to continue to repay their loans. ” There has been no significant increase in non-performing loans from banks, either to households or businesses. The MAS stress tests also show that maximum borrowing firms and households have sufficient reserves to manage impacts on earnings and financing costs,” he said.
As for dealing with this problem, Tan noted that the national monetary education program, MoneySense, actively educates the general public on money control skills. Distressed borrowers can also seek assistance through a variety of channels, Credit Counseling Singapore added.
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