Singapore Strategy – Additional S$48bn to fight the virus March 27, 2020 835

  • S$48bn Resilience (Supplementary) budget plus S$6.4bn Unity Budget 2020 (18 Feb 20) totalling $55bn or 11% GDP. In 2009, the resilience package was S$20.5bn and wth less direct payments to businesses and households.
  • Additional S$15.1 bn to enhance the Job Support Scheme. A four-fold jump to fund monthly wages for all local employees.
  • Additional S$3bn for direct payments to Singaporeans under the enhanced Care and Support package.
  • Transportation sector is a primary focus in this budget. From an equity standpoint, the support package does not raise the attractiveness of the sector when demand is disappearing. It will, however, improve the solvency and viability of the entire supply chain to ride out this downturn. The sectors that benefit from the budget will be: (i) Banks as it helps soften the fallout in the economy; (ii) Necessity spend sectors such as telecommunications and consumer staples as more cash payouts are directed to households.


Key Highlights


Enhance the Jobs Support Scheme (S$15.1bn). The Government will raise its co-funding of the local monthly wages from 8% to 25%. And increase the qualifying ceiling from S$3,600 to S$4,6000. The means the maximum funding per employee per month increases from S$288 to S$1,150.


Enhance the Care and Support Package for households (S$3bn). Triple the cash payout to Singaporeans depending on age and income level, from the S$100, S$200 or S$300 to S$300, S$600 and S$900 respectively. Singapore parents will also triple their cash payouts to S$300. The grocery vouchers will be quadrupled to S$400 for the needy in 2020 and 2021.


Sector snippets


Aviation. A strategic industry for Singapore that contributes 5% of Singapore GDP. There will be a 75% wage subsidy costing S$400mn plus a S$350mn enhanced aviation support package (rebates on landing and parking charges and rental relief).


Tourism-related industry (hotels, travel agents, etc). 75% wage offset, additional S$90mn to help the tourism industry and no property tax.


Land transport. Extend and enhance the Point-to-Point Support Package costing S$95mn (e.g. daily rental relief).  Eligible taxi hirers and PHC drivers will receive the Special Relief Fund payments of $300 per vehicle per month until end-September. One-year road tax rebate for private bus owners totaling $23mn.


Food service. Wage relief of 50% of monthly wages for every local employee under the enhanced Job Support Package and no property tax.


Property. 30% property tax rebate for businesses in offices and industrial properties.


Banks/Financial Institutions. Raising maximum loan quantum under the Enterprise Financing Scheme – SME Working Capital $600mn to $1bn and Trade Loan quantum from $5mn to $10mn with increased government’s risk-share of 80% (prev. 70%). Expanded Temporary Bridging Loan to all sectors with quantum increased from S$1mn to S$5mn.


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About the author

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Paul Chew
Head of Research
Phillip Securities Research Pte Ltd

Paul has 20 years of experience as a fund manager and sell-side analyst. During his time as fund manager, he has managed multiple funds and mandates including capital guaranteed, dividend income, renewable energy, single country and regionally focused funds.

He graduated from Monash University and had completed both his Chartered Financial Analyst and Australian CPA programme.

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