Earlier in the day, the Public Service Division (PSD), Prime Minister's Office announced that the Civil Service year-end payment, or Annual Variable component (AVC), for 2008 will be reduced to half a month, from a month last year.

Responding to this, Mdm Halimah Yacob, Deputy Secretary-General of NTUC said in a statement: 'The lower AVC of 0.5 month this year commensurate with the deepening global economic crisis and slower economic growth that we are facing.

'The NTUC and our civil service unions understand the need for moderation in the face of these challenges. We are indeed grateful that despite the bleak outlook, the government has agreed to pay civil servants the 0.5 month AVC,' said Mdm Halimah Yacob.

'This will help civil servants cope with year end expenses especially the lower wage groups who are most affected by the higher cost of living.'

On the unions' feedback, the NTUC said it has been positive "as they too are poised for tougher times ahead in this poorer economic climate".

'We will continue to work closely with the government and the civil service to move Singapore out of this crisis as fast as we can,' she added.

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