More Singapore firms finding it hard to pay up as partial payments hit near 4-year high in Q1

An office worker at Raffles Place.
An office worker at Raffles Place. PHOTO: ST FILE

SINGAPORE - The payment performance of Singapore firms took a turn for the worse after three quarters of improvement with partial payments hitting a near four-year high in the first quarter of 2016.

Prompt payments in the first quarter of 2016 accounted for less than half of all payment transactions while slow payments made up more than two-thirds of all payment transactions for the first time since the third quarter of 2015, according to the Singapore Commercial Credit Bureau (SCCB)'s latest payment statistics released on Monday (April 4).

Overall prompt payments fell to 41.11 per cent in the first quarter of 2016 - its second lowest reading in one year.

On a quarter-on-quarter basis, overall prompt payments tumbled by 11.99 percentage points from 53.10 per cent in Q4 2015 to 41.11 per cent in Q1 2016.

However, prompt payments at 41.11 per cent was a slight improvement on a year-on-year (yoy) basis, inching upwards by 2.07 percentage points from 39.04 per cent in Q1 2015.

Prompt payment is classified as when at least 90 per cent of total bills are paid within the agreed payment terms, while slow payment is classified as when more than 50 per cent of total bills are paid later than the agreed credit terms.

Slow payments have similarly deteriorated to its second highest reading in one year.

On a q-o-q basis, slow payments jumped by 11.15 percentage points from 35.43 per cent in Q4 2015 to 46.58 per cent in Q1 2016. Compared to a year ago, slow payments slipped by 4.83 percentage points from 51.41 per cent in Q1 2015 to 46.58 per cent in Q1 2016.

Meanwhile, partial payments rose to its second highest peak in four years, climbing by 0.84 percentage points q-o-q for the fourth consecutive quarter from 11.47 per cent in Q4 2015 to 12.31 per cent in Q1 2016. Y-o-y, partial payments edged upwards by 2.76 percentage points from 9.55 per cent in Q1 2015 to 12.31 per cent in Q1 2016.

On a q-o-q basis, slow payments deteriorated across all five industries. This stands in contrast to Q4 2015 when only one of five industries experienced an increase in slow payments. On a y-o-y basis though, payment delays improved across four of five sectors in Q1 2016.