Measures to Encourage Prudence Among Borrowers as Household Liabilities Outpaced Asset Growth
Ministry of FinanceSpeakers
Summary
This question concerns Mr Fadli Fawzi’s inquiry regarding household liabilities outpacing asset growth in late 2025 and potential actions to encourage borrower prudence. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong clarified that for the full year, asset growth exceeded liabilities and household net worth remains fundamentally strong. He noted that assets are nine times liabilities and liquid assets exceed total debt, supported by safeguards like Total Debt Servicing Ratio interest rate floors. The Minister also highlighted borrowing limits for unsecured credit and financial education through MoneySense to discourage over-borrowing and manage persistent debt. The Government will continue monitoring developments and reviewing policies to ensure households remain resilient against economic shocks while maintaining financial stability.
Transcript
39 Mr Fadli Fawzi asked the Prime Minister and Minister for Finance (a) whether the Government is concerned that household liabilities outpaced asset growth in the fourth quarter of 2025 for the first time since 2019, especially if interest rates are not reduced in an inflationary environment; and (b) whether the Monetary Authority of Singapore will take any action to further encourage prudence among borrowers, and if not, why not.
Mr Gan Kim Yong (for the Prime Minister): Over the full year of 2025, Household Assets grew faster than Household Liabilities. The main reason for the increase in Household Liabilities was the rise in mortgages, alongside the pickup in property transactions for owner occupation in the latter half of 2025. Most of the rest of the increase in liabilities was due to personal loans, including those collateralised by assets, mainly for investments and business purposes.
Singapore's household balance sheets remain fundamentally strong, with Household Net Worth continuing to expand. Household Assets are about nine times the size of liabilities, providing substantial buffers against shocks. Liquid assets, such as cash and deposits, also continue to exceed total Household Liabilities.
The Monetary Authority of Singapore (MAS) has also put in place safeguards to pre-empt over-borrowing. For example, the Total Debt Servicing Ratio incorporates an interest rate floor to determine loan affordability and guard against excessive leverage taken when interest rates are low. For unsecured consumer credit, MAS imposes minimum income requirements, borrowing limits and credit suspension for borrowers with persistent debt.
MAS complements these safeguards through public financial education efforts under MoneySense, which promotes prudent money management and discourages over-borrowing. We will monitor developments and review our policies as appropriate.