Current Affairs
Singapore household balance sheet based on data from Singstat

By Chris Kuan :
This is an interesting chart from Bloomberg about Singapore household balance sheet, based on data from Singstat. A few things jump out. Bear in mind Singapore’s GDP is around $420b.
The massive savings surplus – a tad over $1 trillion in deposits, shares and securities, life insurance, pension funds and CPF. This is just a little over $300b in liabilities – credit card, car loans, HDB loans and loans from financial institutions. If Singaporeans are asset rich and cash poor, this assumption is not supported by the data. Or, the top quintile is extremely cash rich leaving the rest cash poor – which is likely to be closer to the truth.
Deposits and currencies at just under $380b are the largest source of savings. This rather tells us about the contradiction in the savings habit – people are risk averse, thus keeping more than required in deposits which given the historically low-interest rates, loses purchasing power due to inflation and cost of living. The banks are….. well laughing their way to the bank. This explains the surprisingly high profitability of local banks despite their high capital ratios.
Next, the huge wealth locked up in housing. Over and above the savings surplus, households have $440b worth of public housing and $410b worth of private housing giving total housing assets of $850b, bigger than the net savings, let alone CPF.
Given the numbers, we should be little surprise that the huge amount of wealth locked in housing is a temptation few politicians including ours, can resist. Hence the burden of financing healthcare and retirement spending is shifted from the government towards households through its control of the land bank. By doing so this also gives the government easy fiscal policy options through which it targeted politically expedient spending, i.e. taking away your household savings on one hand through a housing and then provide benefits if you do not have enough to retire or to take care of your health, making you dependent on government largesse. You should know why elevated real estate prices and monetizing the value of housing is such a cornerstone of government policy – they give it the means to be both fiscally sustainable and the PAP to be politically indispensable to the voters. But fiscal sustainability and political expedience do not come without consequences. Just do not mention who gets to bear them.

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