SINGAPORE – While the number of bankruptcy filings in Singapore reached an 18-year high in 2023, actual bankruptcy resolutions and corporate insolvencies were lower than the number of filings and also below pre-COVID levels.
This was noted in a response to Parliament by Alvin Tan, Minister of State for Trade and Industry and the Ministry of Culture, Community and Youth and Board Member of the Monetary Authority of Singapore (MAS).
In 2023, 3,986 bankruptcy petitions were filed by individuals or their creditors for unpaid debts exceeding S$15,000. The number of applications for compulsory liquidation of companies also peaked at 273 in 2023.
Responding to a question from Yio Chu Kang MP Yip Hon Weng, Tan, on behalf of Finance Minister and MAS Chairman Lawrence Wong, said: “It is important to put the latest insolvency statistics into perspective. Although the number of insolvency filings in Singapore increased in 2023, not all filings resulted in insolvency orders. Actual insolvency orders were lower than the number of applications. The trend in insolvency orders has been broadly stable over the past few years and is also below pre-COVID levels.”
Likewise, the actual number of company liquidations in 2023 was much lower and also below pre-COVID levels.
Domestic interest rates rose sharply
Yip had asked: “With the number of personal bankruptcies at an 18-year high and the number of corporate bankruptcies rising in 2023, whether this is a cause for concern for the government.” He also asked whether the rise in bankruptcies was primarily due to difficulties in servicing existing debts or also due to greater risk-taking in new ventures, and whether the government plans to provide additional services to address this problem, such as expanded debt counselling services or financial literacy programmes.
Tan added: “The number of bankruptcy filings has increased in recent years due to the difficult macroeconomic and financial environment for businesses and individuals. Higher global interest rates have also led to a sharp increase in domestic interest rates.”
Nevertheless, most companies and households were able to continue servicing their loans. “There was no significant increase in banks’ non-performing loans, either for retail or corporate customers. The MAS stress tests also show that most companies and retail customers have sufficient buffers to cope with income and financing cost shocks,” he said.
As for services to address the problem, Tan pointed out that the national financial education program MoneySense is actively educating the general public on how to manage money. Borrowers in distress can also seek help through various avenues, including Credit Counselling Singapore.
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