Payment performance of Singapore firms falls slightly in Q2, Economy News & Top Stories

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SINGAPORE (THE BUSINESS TIMES) – Payment performance of local firms fell slightly after three consecutive quarters of improvement, the Singapore Commercial Credit Bureau (SCCB) said on Monday.

Occurrences of prompt payments fell by 1.7 percentage points to 40.8 per cent in the second quarter, down from 42.5 per cent in the previous quarter, but rose 0.7 percentage points from 40.1 per cent in the same period last year.

Conversely, occurrences of slow payments saw an increase of 1.5 percentage points to 44.6 per cent in the second quarter, from 43.1 per cent in the first quarter, but dipped 1.2 percentage points year on year from 45.8 per cent.

Meanwhile, occurrences of partial payments were at 14.7 per cent, up 0.3 percentage points quarter on quarter from 14.4 per cent, and up 0.6 percentage points year on year from 14.1 per cent.

The construction, retail and consumer service sectors saw a rise in slow payments, while the manufacturing and wholesale sectors recorded a fall.

Similar to the previous quarter, the construction sector registered the highest proportion of slow payments, which accounted for more than half of payment transactions in the second quarter of this year. The sector’s occurrences for slow payments increased 1.8 percentage points quarter on quarter to 55.8 per cent from 54 per cent.

The retail and consumer service sectors, however, saw the highest increase in payment delays from the previous quarter. The retail sector was up by 3 percentage points to 45.3 per cent from 42.3 per cent, while the service sector was up by 2.6 percentage points to 43.7 per cent, from 41.1 per cent.

SCCB chief executive Audrey Chia said: “We saw an increase in firms experiencing cash flow woes, particularly the retail and consumer service sub-sectors, which were adversely affected by the string of Covid-19 restrictions and measures being implemented in the previous quarter.”

However, she noted that payment performance improved from the same period last year. “Notwithstanding the uncertainties in the trajectory of the pandemic, we anticipate any improvements in payment performance to be gradual in the coming months,” Ms Chia said.

Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms, while slow payment happens when less than 50 per cent of total bills are paid within the agreed terms. Partial payment refers to when between 50 per cent and 90 per cent of total bills are paid within the agreed payment terms.