More CDC vouchers, support for businesses in additional $900 million support package

SINGAPORE – Households and businesses will get another $900 million in government support to cushion the continued impact of high energy prices caused by uncertainty in the Middle East.

This includes $300 more in CDC vouchers for every household, as well as additional rebates in October 2026 and January 2027 to offset higher utility bills, Second Minister for Finance Jeffrey Siow announced on July 29.

Other measures include cash grants of at least $500 for every small and medium-sized enterprise (SME) with a local employee, and up to $1,200 in rental support for stallholders at hawker centres and markets.

Siow said the world has avoided the worst-case scenario of further escalation and severe shipping disruption in the Persian Gulf. But the situation remains fragile, and a durable ceasefire between the United States and Iran is proving difficult.

The Government expects global energy prices to remain elevated, which will translate to higher costs for petrol, diesel and electricity, as well as certain imported goods, said Siow, who is also Transport Minister, at a press conference at the Treasury building.

While Singapore’s economy has held up better than expected, the performance was uneven, he noted.

The economy grew 6.3 per cent in the first quarter of 2026, and advanced estimates showed 5.7 per cent growth in the second quarter. Siow said this was supported by strong investment in artificial intelligence, and that “we expect this momentum to continue”.

But businesses that are more exposed to supply disruptions and energy costs have come under greater pressure. SMEs, in particular, feel these cost pressures more acutely, he added.

In a Facebook post later that day, Prime Minister Lawrence Wong said the Government is rolling out a second package of support measures to provide additional help as the situation in the Middle East remains volatile, and Singapore continues to feel the effects at home.

“These measures build on the support we have already provided, and I hope they will give Singaporeans greater confidence as we navigate this period of uncertainty together,” he said.

Outlining the support for businesses, Senior Minister of State for Trade and Industry Low Yen Ling said hawkers selling cooked food will receive $1,200, while market stalls will get $600 over six months from September to February 2027.

The Government expects 160,000 SMEs to benefit from the cash grant, she added. These will be disbursed in November, and are capped at $2,500 per business.

The Government will also increase its risk-share, or the share of a bank’s losses that it will absorb if a borrower defaults, from 50 per cent to 70 per cent in two financing schemes for businesses: the working capital loan scheme and the project loan scheme.

It will also expand the project loan scheme, which currently applies only to overseas projects, to domestic projects by local construction companies.

“This will make it easier for them to secure financing to manage higher costs amidst a challenging environment,” said Low.

Two-thirds of the second $900 million package will be used to support households, with the rest going to businesses, the Ministry of Finance said.

Taken together with the earlier $1 billion package announced in April, government support now amounts to around $2 billion, on top of schemes from Budget 2026, said Siow.

The previous support package brought forward CDC vouchers and increased the cost-of-living special payment. It also included $200 in cash for platform workers, private-hire car drivers and taxi drivers, among other measures.

When the first package was introduced, the priority was to get the assistance out as soon as possible, Siow said in response to a question on why the latest round of support does not focus on larger businesses.

The Government’s objective then was to help businesses adjust to the sudden price shock, he added. “Now that a bit of time has passed since the initial energy spike and the initial crisis, there’s an opportunity for us to be more focused and targeted in our measures.”

That is why the focus for this second tranche is on companies that are more affected by supply chain disruptions and energy costs, including SMEs that have “less buffer” to cope with sustained cost increases, he said.

The two packages should be seen together, he added. “The first was really to prioritise speed, and the second package is a more focused one that looks at specific areas.”

Siow’s announcement of a second support package comes after the Monetary Authority of Singapore on July 27 said it would increase the rate of the Singapore dollar’s appreciation to combat inflation. MAS added that it expects Singapore’s imported costs to rise in the quarters ahead.

Households are also seeing higher energy prices. In June, the Energy Market Authority announced a 17 per cent increase in the electricity tariff for July to September. Town gas tariffs also went up by 7.1 per cent.

Asked why additional support is needed, given that economic growth has been healthy, Siow said on July 29 that there is feedback from parts of the economy that help is needed.

There is also significant uncertainty about the next few months, he said, and it is difficult to tell if the situation will deteriorate or if the good economic performance will continue.

“We don’t know if the investment in AI, for instance, will continue to be sustained,” he added.

Singapore Business Federation chairman Mark Lee welcomed the measures, saying the elevated energy prices continue to weigh on business costs, though they have moderated from their peak.

Enhancing the risk-sharing scheme will help firms bridge their capital needs and continue taking projects and orders, he said, adding that the extension of the project loan scheme is particularly relevant, given the construction sector’s upfront costs and long payment cycles.

The one-off SME cash grant, while modest, provides direct and automatic assistance to smaller businesses without adding to their debt burden, said Lee, who is also a Nominated MP.

“Cash flow is the lifeblood of every business. Taken together, these measures will provide breathing space for SMEs, preserve business activity and help companies retain their workers,” Lee said in a statement on July 29.

On funding the support package, Siow said ministries and agencies will work within the Budget that has been approved for 2026. But if there is a need to seek a supplementary budget, the Government will do so later in the year, he said.

“We believe this is the right response given the economic conditions today,” he said, noting, however, that the global situation remains fluid, and the Government is receiving regular feedback on the ground.

“If the circumstances change, we stand ready to respond.”