Singapore firms take up $17.4 billion in govt-backed loans amid Covid-19 pandemic

Minister for Trade and Industry Chan Chun Sing (first from left) on a tour of wholesale trade company PS Energy's facility in Bulim Avenue. PHOTO: MINISTRY OF TRADE AND INDUSTRY

SINGAPORE - More than 20,000 businesses took up some $17.4 billion in loans through schemes overseen by Enterprise Singapore (ESG) from March to December 2020 - more than 13 times the credit extended under ESG-supported loans for the whole of 2019.

The schemes, which include the Temporary Bridging Loan Programme, were introduced or enhanced to tackle challenges posed by the coronavirus pandemic, such as cash flow constraints.

The wholesale trade sector, a key pillar of Singapore's economy that accounts for 12 per cent of gross domestic product, is one of the top sectors that have benefited from these loan schemes, said Trade and Industry Minister Chan Chun Sing on Friday (Jan 8).

Wholesale trade firms accounted for about one-fifth of approved loans, while the hard-hit construction sector made up 16 per cent of loans. Other sectors which benefited include manufacturing, retail and the service sectors.

While the coronavirus pandemic has negatively affected the wholesale trade sector in the short term, Singapore remains optimistic about its prospects for the long term, he said.

"We are cautiously optimistic that in 2021, we'll see a rebound for the sector for most of the commodities traded within the overall sector," he said, noting that most of the players are positive about the year ahead.

The wholesale trade sector contributes to more than 320,000 jobs or 9 per cent of Singapore's workforce, and spans over 50,000 firms.

The sector includes firms that import and export food and beverages, and those in electronics and machinery, said Mr Chan. He was speaking to the media after a visit to wholesale trade firm PS Energy, which distributes fuels and lubricants.

Mr Chan highlighted three factors that will shape the wholesale trade sector in the coming years - the shift in supply chains and trade flows; the increasing use of digital technology in conventional arbitrage and to provide greater transparency; and the search for greater resilience, reliability and efficiency in operations.

Speaking of the last factor, Mr Chan said it presents opportunities for local companies "because in Singapore, we have built ourselves a reputation of being efficient, reliable, dependable".

"So this is an added service that we can provide for the rest of the world," he said.

In addition to providing loans, the Government has also helped firms in the sector by helping them build up new capabilities, such as through the adoption of digital technologies.

This is a strategy to help firms capture new market opportunities, and will help to strengthen Singapore's position in the regional and global wholesale trade market, said Mr Chan.

He cited PS Energy as among firms actively investing in digitalisation initiatives to optimise processes and raise productivity - the firm has used a new technology to strengthen the traceability and transparency of its processes.

Said the minister: "We are quietly optimistic that the wholesale trade sector will continue to grow in Singapore. We will diversify into many other new products within wholesale trade.

"At the same time, it will create many more good jobs for Singaporeans in this particular sector."

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