The payment performance of local firms improved from an all-time low in 2016, with the annual average proportion of prompt payments rising from 43.77 per cent to 48.4 per cent last year.

According to a Singapore Commercial Credit Bureau (SCCB) report yesterday, the annual average proportion of slow payments fell by 5 percentage points from 44.71 per cent in 2016 to 39.71 per cent last year. Partial payments rose to a seven-year high last year, from 11.52 per cent in 2016 to 11.87 per cent.

Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms. Slow payment refers to when less than 50 per cent of total bills are paid, and partial payment is when between 50 per cent and 90 per cent of total bills are paid.

The quarterly statistics for the fourth quarter of last year also showed signs of improvement, as prompt payments accounted for about half of all payment transactions, while slow payments fell to nearly one-third of all payment transactions.

Compared with the previous quarter, prompt payments rose by nearly 3 percentage points from 47.43 per cent in the third quarter to 50.40 per cent in the fourth. When compared with the fourth quarter of 2016, prompt payments rose by around 4.5 percentage points.

Slow payments fell from 40.75 per cent in the third quarter to 36.92 per cent in the fourth quarter. Year-on-year, slow payments dropped by nearly 6.4 percentage points.

Meanwhile, partial payments edged up from 11.82 per cent in the third quarter to 12.68 per cent in the fourth quarter, hitting a new high.

Based on industry, quarter-on-quarter slow payments improved across the board.

Compared with the third quarter, only one industry - construction - saw a deterioration in slow payments. The construction sector continued to experience the highest proportion of payment delays for the eighth consecutive quarter.

"Despite the cash flow woes experienced by local firms, we are seeing more firms fulfilling their debt obligations partially, if not fully. Partial payments are always better than non-payments," said D&B Singapore chief executive Audrey Chia.

"This reflects a healthy sign that firms are exercising better credit vigilance and putting stringent controls in place to ensure they remain credit-worthy in the eyes of their credits and not to default completely on their debts."

SCCB is part of D&B Singapore.