S'pore firms got $27.4 billion in grants last year, with $17.4 billion approved in loans

Between April and December last year, a total of $22.6 billion was given out under the Jobs Support Scheme.
Between April and December last year, a total of $22.6 billion was given out under the Jobs Support Scheme.ST PHOTO: JOEL CHAN

SINGAPORE - Businesses here got a total of $27.4 billion in grants last year, the bulk of which went towards subsidising wages under the Jobs Support Scheme (JSS).

Another $17.4 billion in loans was approved between March and December, under schemes set up to ensure viable firms retained access to credit amid the Covid-19 pandemic.

These figures were disclosed by the Finance Ministry (MOF) on Thursday (Feb 11), in a report on the impact of last year's Budget measures to help Singapore tackle the crisis.

Early data has been encouraging, the ministry added, saying: "The schemes appear to be reaching the intended target groups and achieving the objectives of preserving jobs and cushioning the shocks to businesses and households."

Between April and December last year, a total of $22.6 billion was given out under the JSS, which subsidised a portion of employee wages to help firms keep from laying off staff.

Support was tiered depending on how heavily sectors were impacted by the pandemic, with Tier 1 firms getting about $1 million each or $2 billion in total.

However, Tier 3 firms - the least-affected group - got the largest share overall, as they formed the largest share of the economy. The payout for each firm in this tier was about $100,000.

The Monetary Authority of Singapore has estimated that the economic support measures rolled out during the Covid-19 pandemic helped to save or create around 155,000 jobs over this year and last year, with the JSS accounting for half this impact.

In its report, MOF noted that Tier 1 and 2 firms made up 42 per cent of the 28,000 job losses from January to March, which was significantly higher than its pre-crisis share of employment.

But when the JSS kicked in, firms in this group contributed towards 22 per cent of the 101,000 job losses between March and July.

"This suggests that the higher level of support to the most adversely affected firms could have helped them retain their workers," it said.

Apart from the JSS, firms also received grants under schemes such as foreign worker levy rebates, the Wage Credit Scheme that co-funds wage increases, and the Small and Medium Enterprise (SME) rental grant.

The wholesale trade and construction sectors got the highest disbursements overall, partly due to the large number of firms in these industries, MOF said.

Roughly 90 per cent of grant funding came from the JSS in the wholesale trade, professional services and financial services sectors. In contrast, foreign worker levy rebates accounted for around 40 per cent of grants received in the construction industry.

In total, businesses got $25.9 billion more in grants last year than the $1.5 billion given out in 2019.

MOF also noted that three financing schemes - the Temporary Bridging Loan Programme, Enhanced Working Capital Loan and Enhanced Trade Loan - supported over 20,000 firms in access loans worth $17.4 billion.

This was more than 13 times the $1.3 billion supported through comparable Enterprise Singapore schemes for the whole of 2019, it said.

Around 90 per cent of the businesses who benefited were SMEs, with application success rates over 90 per cent. The wholesale trade, construction, and manufacturing sectors received the largest amount of approved loans in total.

The Ministry of Trade and Industry's preliminary analysis has found that these financing schemes led to improvements in firm-level outcomes, such as supporting employment and average wages.