While the total size of Singapore’s reserves has been shrouded in secrecy by the Government, ironically, the figure – estimated to be at around S$1.48 trillion, which would bring an annual income of about S$74 billion at a conservative 5 per cent interest – is publicly available from sources like the Monetary Authority of Singapore (MAS) and some news reports.

Over the years, the Singapore government has refused to disclose the full extent of the country’s financial reserves.

When Leader of the Opposition and Workers’ Party (WP) chief Pritam Singh asked in Parliament last year about the size of Singapore’s reserves, Deputy Prime Minister Heng Swee Keat replied saying that it goes against the national interest to reveal the exact figure.

“It is neither in the interest of Singapore, or Singaporeans, to repeatedly ask about the size of our reserves. We are in the middle of a storm, and I’m very disappointed that Mr Pritam Singh has used this occasion to raise this question again,” said Mr Heng, who is also the Finance Minister.

He declined to reveal the size of Singapore’s reserves on grounds that it serves as a “strategic defence” to protect the Singapore dollar from speculative attacks, and bolster the confidence of investors and citizens.

“No country’s armed forces will ever tell you exactly how much ammunition and weaponry they really have. To do so is to betray valuable intelligence to potential adversaries. This is obviously not a wise defence strategy, and likewise should not be adopted for our financial reserves.

“As a small country without any natural resources and highly dependent on imports, our reserves are vital to our overall economic and financial stability, and our well-being,” said the Minister.

Non-Constituency Member of Parliament (NCMP) Hazel Poa from the Progress Singapore Party (PSP) has also called for greater transparency on the national reserves in favour of allowing Members of Parliament (MPs) to make informed decisions when voting for a Budget.

“While I do not yet know the answer to that question, I do know that Members of Parliament are being asked to vote on a Budget that would require a draw-down on our reserves without knowing its size. Without knowing our nation’s financial position, it would be difficult to make sound and prudent decisions, and certainly not informed ones.

“So again, I ask that more transparency with regards to the national reserves be made, if not only that Singaporeans better understand the rationale for difficult decisions like the need to raise the GST to 9 per cent in the future,” said Ms Poa in Parliament earlier on 24 February.

She also questioned if President Halimah Yacob is aware of the exact size of the reserves when the President made decisions on its draw-down.

Responding to Ms Poa’s speech, People’s Action Party (PAP) MP for Bishan-Toa Payoh GRC Saktiandi Supaat spoke out against revealing the full extent of the country’s financial reserves.

“Publicising data from our reserves is akin to revealing the size of our ammunition, to hedge funds and speculators out there with large pools of funds to play with,” he said, echoing what Mr Heng has been saying all along.

Mr Saktiandi explained that the country would be vulnerable to “currency speculation and attacks”, as it uses the exchange rate as the main instrument in monetary policy, compared to most other countries which use interest rates.

“As a financial centre, there’s also the risk of capital flows if our currency is attacked for speculative reasons. I don’t think we want to add in the element of this risk into the equation for our Singaporean job seekers,” he noted.

Sengkang GRC MP Jamus Lim countered him, saying that if Singapore was off fundamentally determined exchange rates, market participants can be encouraged to “engage in speculative activity” that would get Singapore back on its fundamental exchange rate.

“While it is convenient to argue that we have a distinct system in terms of exchange rate policy, by purchasing power parity, all exchange rate policy is in fact monetary policy.

“So even though it is the case that we target explicitly the exchange rate, it will have implications for inflation,” argued Assoc Prof Lim, who is an economics professor.

In response, Mr Saktiandi reiterated that the impact of the currency attacks “can never be stabilising” and that it would have ramifications on the economy and jobs.

Govt refused to declare the total size of Singapore’s reserves, yet the figure is publicly available

Singapore’s reserves comprise assets invested by three organisations – Monetary Authority of Singapore (MAS), Government of Singapore Investment Corporation (GIC), and Temasek Holdings – which are given the mandate to invest some of the reserves to maximize the long-term value of the assets.

Now, we know that both MAS and Temasek disclose the sum of the funds they invest, but those invested by GIC are not disclosed.

MAS has about US$382.6 million in total official foreign reserves as of February this year. After conversion, MAS’ total official foreign reserves amounted to S$515 billion.

As for Temasek Holdings, its current portfolio is valued at S$306 billion as of 31 March last year.

Meanwhile, the Business Times reported earlier in January that GIC owns US$488 billion worth of assets under management (AUM), which is about S$657 billion after conversion.

So, from these numbers alone, we can estimate Singapore’s national reserves to be at least S$1.48 trillion.

Foreign reserves (S$515 billion) + Temasek portfolio (S$306 billion) + GIC (S$657 billion) = S$1.48 trillion

The estimated figure is not even including the value of land and building assets, which are also part of the reserves.

It is also worth noting that the Net Investment Returns Contribution (NIRC) consists of 50 per cent of the Net Investment Returns (NIR) on the net assets invested by the three entities – GIC, MAS, and Temasek – and 50 per cent of the Net Investment Income (NII) derived from past reserves from the remaining assets.

This means that the Government can spend 50 per cent of estimated gains from the investment, and put the remaining 50 per cent back into the reserves to preserve its growth for future use.

Blogger Leong Sze Hian thinks it “doesn’t make sense” to increase taxes now

Last year’s expansionary Budget is expected to run Singapore’s largest deficit since the country’s independence in 1965, with an overall deficit of S$64.9 billion, or 13.9 per cent of gross domestic product (GDP).

Mr Heng said that the deficit is driven by lower revenues due to dampened economic backdrop and significant expenditures needed to mount “a decisive response to COVID-19”.

Separately, in his Budget 2021 speech, he announced the increase in petrol duty rates by 15 cents per litre for premium petrol and 10 cents per litre for intermediate petrol.

Mr Heng also noted that the Goods & Services Tax (GST) will be extended to all imported low-value goods beginning 2023.

Additionally, imported non-digital business-to-consumer (B2C) services will also now be charged GST. This refers to services provided over the internet and other electronic networks that require human interaction, such as education services, fitness training, telemedicine, and counselling.

In an interview with TOC on 25 March, veteran blogger Leong Sze Hian said that it “doesn’t make sense” to increase taxes now, considering that many people – especially cab drivers – are facing reduced income due to the impact brought by the COVID-19 pandemic.

“Let me give you my perspective. If the return last year was let’s say 5 per cent, that’s about S$74 billion. Now the deficit was about S$65 billion. So if [we] take the 1-year return and pay off last year’s deficit of S$65 billion for the COVID-19, [we] still have access to S$9 billion.

“[This] hasn’t even count the land sales every year of S$10 plus billion that would be added. So in a sense, why is there a need to increase GST and taxes when all these taxi drivers and private car drivers are already having a reduced income? All these to me doesn’t make sense,” he remarked.

For comparison, the Norwegian Government Pension Fund Global (GPFG) returned 10.9 per cent in 2020, despite the COVID-19 pandemic affecting world’s economy. This was announced by the Norwegian wealth fund in January this year.

The Government is busy increasing taxes when the country is in “the worst economic crisis”, said Mr Leong, adding that small businesses in Singapore may be facing difficulty in passing on the cost to consumers.

He opined that the Government has decided to conceal the exact size of the national reserves to avoid people from questioning their moves, as revealing the reserves would be as similar as “letting the cat out of the bag”.

“If you compare with other countries, we have the highest reserves per capita in the world. We are like the richest man in the world, but when it comes to a lot of things we’re very stingy,” said Mr Leong.

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