Singapore Analytical Update: April 24, 2020

Singapore Analytical Update | April 24, 2020
Authors: Marc Mealy, Shay Wester, Kim Yaeger, Lilibeth Almonte-Arbez, Sarah Lessing, Julianne Alberto​​​​​, and J-Ren Ong
 

Singapore extends Circuit Breaker measures 

On April 21, Singapore announced that circuit breaker measures would be extended until June 1, and existing regulations will be tightened until May 4. More workplaces will be closed such as hairdressing, barber services, and standalone outlets that sell only beverages, packaged snacks, confections, or desserts. The Ministry of Trade and Industry issued a press release reducing the number of businesses allowed to operate at their work premises and outlining the restrictions on food and beverage and retail establishments. In his 4th national address on COVID-19, Prime Minister Lee Hsien Loong assured Singaporeans and residents that the government would take more measures to protect affected workers. COVID-19 cases increased in foreign worker dormitories amidst more testing and overcrowding concerns. Mild cases will be housed either on site, in a separate facility within the dorm, or community care facilities elsewhere. Those who need more active treatment will get immediate medical attention and will be taken promptly to hospitals.

According to the April 21 press release of the Ministry of Finance (MOF), the Singapore government will extend the 75% Job Support Scheme (JSS) wage subsidy to employees across all sectors for another month thru May. The MOF has also expressed commitment to adjust any future JSS payouts to account for actual wages paid in May 2020 as opposed to the November 2019 computation currently in use. JSS payouts will also cover the wages of employees who are also shareholders and directors of companies registered on or before April 20, 2020. This is expected to benefit 50,000 shareholder-directors. Singaporeans who are unemployed due to COVID-19 can apply for the COVID-19 grant which provides for cash support for three months.

Singapore will extend a Foreign Worker Levy (FWL) waiver and FWL rebate by one month to ease labor costs of firms that employ foreign workers during the Circuit Breaker period. The FWL waiver is part of the support announced earlier under the Solidarity Budget and was due in April 2020. Additionally, employers will receive an FWL rebate of SG$750 (US$525) for each work permit or S Pass holder in employment. According to the Ministry of Manpower’s press release, more than 62,000 employers will benefit from almost SG$675 million (US$459.8 million) in the first wave of levy rebate payouts.

Previously announced relief measures would continue to apply with self-employed persons (SEP) in the low-income bracket to receive SEP Income Relief Scheme until December 2020 and with 90% of adult Singaporeans expected to receive a direct transfer from the Solidarity Payment. The Enhanced Care and Support package from the 2020 Budget will be paid out from June 2020 together with the additional cash payments to parents and the elderly.  

Monetary Authority Singapore to Lend Banks Singapore Dollars at Near-Zero Interest

On April 20, the Monetary Authority of Singapore (MAS), in partnership with Enterprise Singapore (ESG), launched the MAS SGD Facility for ESG Loans (the Facility). The Facility will now lend Singdollars to eligible financial institutions at an interest rate of 0.1 per cent per annum for a two-year tenor. Banks will in turn just about halve the interest rates of loans made to Small-and-Medium-sized Enterprises (SMEs) to between 2 and 3 per cent down from 6 per cent or higher at the beginning of 2020. The establishment of the Facility reinforces the enhancements made under to ESG Loan Schemes announced in the Solidarity Budget, which increased the Government risk-share of loans to 90%. The Facility is a further measure to support financial institutions by making loans to cash-strapped SMEs more affordable.