Grant to IMF's Poverty Reduction and Growth Trust

Mr Deputy Speaker: Deputy Prime Minister and Minister for Trade and Industry.

5.06 pm

The Minister of State for Trade and Industry (Mr Alvin Tan): Mr Deputy Speaker, on behalf of Deputy Prime Minister and Minister in charge of the Monetary Authority of Singapore (MAS), I move, "That this Parliament, in accordance with section 6A(2)(d) of the Bretton Woods Agreements Act 1966, resolves that the maximum amount of grants that the Monetary Authority of Singapore may give, under a bilateral agreement (or its subsequent variations) to be made by the Monetary Authority of Singapore (on behalf of the Government of the Republic of Singapore) and the International Monetary Fund (IMF) to support the IMF's Poverty Reduction and Growth Trust (PRGT) is 21,000,000 Special Drawing Rights, approximately US$28,600,000."

Sir, I will be moving a second Motion for a separate grant of SDR 4.48 million, approximately US$6.1 million to the IMF's Trust for the Special Poverty Reduction and Growth Operations for the Heavily Indebted Poor Countries (PRG-HIPC Trust), to support Sudan's debt relief.

Sir, with your permission, I would like to propose that the substantive debate on both of these Motions takes place now, to allow the key considerations to be covered in a single debate. Subsequently, I will move the second Motion separately, in compliance with Parliamentary procedural requirements.

Mr Deputy Speaker: Yes, I give my consent to one debate and then two votes.

Mr Alvin Tan: Thank you, Sir. Sir, as part of its mandate to ensure the stability of the international monetary system, the IMF provides financial assistance to countries experiencing balance of payments difficulties. To carry out this important function, the IMF relies on resources provided by member countries, including Singapore. This has allowed the IMF to respond to external shocks, including the COVID-19 pandemic and the war in Ukraine, by stepping up financing support to member countries.

The IMF has been stepping up its financial support for member countries to build resilience in an increasingly fragmented and fragile external environment. Since the pandemic, it has deployed US$1 trillion in global liquidity and reserves through lending and allocation of Special Drawing Rights (SDR). Notably, it made the largest SDR allocation of US$650 billion to its member countries in 2021. This SDR allocation was made to enable all members to address the long-term global need for reserves, build confidence and foster resilience of the international economy through a series of disruptive events.

As required under the IMF's Articles of Agreement, the US$650 billion SDR general allocation was distributed in proportion to the quota shares of IMF's members and not according to the relative needs of its members. Singapore received 3.73 billion in SDR, notwithstanding that we did not require an augmentation of our resources.

The IMF is now calling on members with strong economic fundamentals and ample official foreign reserves to channel some of their SDR to various IMF trusts and programmes to support more vulnerable IMF members. The amounts that Singapore has been asked to contribute are in line with Singapore's quota share at the IMF and a relatively small portion of the 3.7 billion SDR we received from the IMF in 2021. Singapore will also be providing these contributions as part of broader, multilateral effort to support IMF's capacity to assist vulnerable, low-income countries.

Sir, the Bretton Woods Agreements Act enables the MAS to make grants through the IMF as part of international efforts to assist countries in need. This is subject to four conditions.

First, the IMF requests Singapore to assist in support of a fund programme for the benefit of one or more countries. The PRGT and PRG-HIPC Trust are such fund programmes.

Second, at least one other member country has provided or intends to provide similar financial assistance. This condition has been fulfilled, with a good representation of member countries pledging support or already contributing to the two programmes.

Third, MAS publicly discloses key information about the financial assistance via a Gazette publication.

Fourth, Parliament fixes by resolution the maximum amount of the grants.

I will now explain the specific context and considerations for the two grants.

First, Singapore's grant contribution to the Poverty Reduction and Growth Trust (PRGT). The PRGT supports the IMF's concessional lending to low-income countries. It plays a central role in debt resolution for distressed countries and provided emergency support to many low-income countries during the COVID-19 pandemic. The IMF's annual lending commitments increased five-fold compared to the pre-pandemic period to 5.5 billion SDR per annum during 2020 to 2023.

This surge in lending during the pandemic, coupled with the sustained high financing needs post-pandemic, driven by tighter financial conditions and rising food prices, have placed significant strain on the PRGT's finances. The IMF is hence seeking voluntary contributions from economically stronger member countries to support the PRGT's longer-term financial sustainability. The IMF has requested that Singapore provide a contribution of 21 million SDR, equivalent to US$28.6 million.

Sir, Singapore's contribution will be part of a broader multilateral effort, with 45 member countries, including the United States (US), having also pledged to contribute to the PRGT. The quantum of our proposed contribution to the PRGT is commensurate with our quota share at the IMF, which stands at 0.82% today.

Next, Singapore's grant contribution to the PRG-HIPC Trust to support Sudan's debt relief.

Let me first provide some background on the broader PRG-HIPC Trust. The IMF and World Bank launched the Heavily Indebted Poor Countries (HIPC) Initiative in 1996. It is to ensure that no poor country faces an unmanageable debt burden. To be eligible for the HIPC Initiative, countries need to meet certain criteria and also to commit to policy changes to reduce poverty, and then demonstrate a record of doing so.

In 2005, the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative. This allows countries to receive 100% relief on eligible debts by the IMF, the World Bank and the African Development Fund after demonstrating sustained economic performance, implementing key structural and social reforms and also maintaining macroeconomic stability.

IMF financing for the HIPC Initiative comes from bilateral contributions from members and IMF resources, mainly investment income on proceeds from the IMF's gold sales in 1999. However, resources in the PRG-HIPC Trust have been insufficient to finance debt relief to the remaining two HIPC countries with protracted arrears to the IMF – that is, Somalia and Sudan. The IMF has thus initiated separate fundraising efforts to mobilise the resources needed for it to cover its share of debt relief to Somalia and Sudan. In 2021, following Parliament's approval, Singapore contributed SDR 0.68 million, approximately US$0.93 million to Somalia's debt relief. There has been no request for further contribution to Somalia.

Sir, turning to Sudan. Sudan is amongst the world's poorest countries, with an estimated two thirds of its population living in poverty. Its history is marked by political instability, internal conflict and isolation from the world economy. Following Sudan's efforts to re-engage with the international community in 2020, it met the necessary conditions to begin receiving debt relief under the HIPC Initiative. Completing this process would allow Sudan to regain debt sustainability and help it implement essential reforms to free up resources to tackle poverty and improve the social conditions for its people.

For Sudan, the IMF has requested Singapore to contribute 4.48 million SDR, equivalent to approximately US$6.1 million. The quantum of our contribution is determined based on our quota share at the IMF. Similar to the PRGT, Singapore’s contribution towards the debt relief for Sudan is part of a broader multilateral effort, with 122 members also having pledged to contribute, including our ASEAN-4 neighbours: Indonesia, Malaysia, Philippines and Thailand.

Why should Singapore make these contributions to the IMF, considering today’s uncertain global environment? With multilateralism under threat, we should support multilateral institutions such as the IMF to help them to play their role in maintaining the stability of the global system.

It is also in Singapore’s interest to do so, because we are a stakeholder in the international community and it is our role to support the IMF. As a small open economy with multiple connections to global markets, Singapore has an interest in supporting initiatives that promote global resilience to crises and to safeguard stability in the global monetary system. Singapore also joins a broader base of other countries in supporting IMF programmes.

Sir, the impact of our contributions on our official foreign reserves (OFR) is not significant. As noted earlier, Singapore’s OFR increased by 3.73 billion SDR following IMF’s 2021 SDR allocation. Against this, our contribution to the PRGT will thus draw from Singapore’s allocation of the SDR, resulting in a reduction of MAS’ OFR by a relatively modest 21 million SDR, approximately US$28.6 million. The contribution to the PRG-HIPC Trust will be funded from Singapore’s share of IMF’s existing resources in IMF accounts and will not affect the size of MAS’ OFR. The proposed grant amounts are also proportionate to Singapore’s quota share at the IMF and are consistent with Singapore’s standing in the international financial system.

Mr Deputy Speaker, MAS has issued a media release on 28 January 2026 to inform the public of its intention to participate in the package of contributions to the IMF, including the grants for which it would seek Parliament’s approval. Following Parliament’s resolution to fix the maximum amount of grants that MAS can allocate to the IMF’s PRGT and PRG-HIPC Trust, MAS will publish in the Gazette key information about the grants. Mr Deputy Speaker, I beg to move.

Mr Deputy Speaker: Mr Saktiandi Supaat.

5.18 pm

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Deputy Speaker, Sir, I would like to declare that I work in a foreign bank. Mr Deputy Speaker, the Government Parliamentary Committee (GPC) for Finance, and Trade and Industry Members and I have worked to discuss on these two Motions.

Our GPC Members for Finance, and Trade and Industry – Member Victor Lye, Shaun Loh, Ng Shi Xuan and Lee Hong Chuang – come from varied backgrounds including finance and investments, local business and industry. We will be sharing our concerns and clarifications as well as some suggestions on these two Motions. Mr Victor Lye will touch on global stability, prudence and Singapore’s national interest. Member Ng Shi Xuan will focus on careful examination of safeguards, proportionality and accountability in Singapore’s IMF contributions. Mr Lee Hong Chuang aims to provide a strategic, values-based case for multilateral engagement grounded in Singapore’s economic interests. Member Shawn Loh will touch on the longer-term picture of multilateral institutions like the IMF and asking what our strategy would be.

Mr Deputy Speaker, I rise in support of both Motions. Singapore has always affirmed that contributing as a responsible member of the international community is in our national interest. Having once been a beneficiary of World Bank financing that supported our early infrastructure development between 1963 and 1975, we recognise that promoting stability, growth and debt sustainability in lower-income and vulnerable economies contributes to a more resilient global system, one that ultimately benefits a small and open economy like Singapore.

However, I do have some clarifications and suggestions, which I would put in three main buckets.

First, I wonder how much our world view has evolved, or needs to evolve, amidst the changing world order that we see today. The IMF is founded upon the United Nations and Bretton Woods system which has underpinned international economic relations for decades since World War II.

On that basis, I am aligned with Minister Ong Ye Kung’s statement when we moved similar Motions in this House back in 2021, that “it is in Singapore's interest to be part of this international community where we work together, where we cooperate, where there are rules, there are norms, there are best practices that hold every country into account to ensure that we live peacefully together in a global village”.

However, today we see that old multilateral world order is under threat, if not already consigned to history. Many countries are turning protectionist and focusing on narrow conceptions of national interest. So, the question I have is, do Minister Ong’s words in 2021 still hold true? It has been five years since. Do they still justify our continued contribution of significant amounts to uplift other countries in need?

One of the safeguards that Parliament had implemented on our loans and grants to the IMF is that our contribution must be part of a multilateral effort. In the latest round of collective fundraising for the PRGT and for supporting Sudan’s debt relief efforts, how many countries are joining the efforts and who are they? Are there any notable omissions?

The increasing fragmentation of the global world order also poses interesting questions for us. Just recently, we have seen news that the US has invited Singapore to join its “Board of Peace” to supervise the next phase of the Gaza peace plan. Commentators have observed that Gaza may just be a pretext for setting up a corporate version of the United Nations, where countries may buy themselves a permanent seat at the table for US$1 billion payable in case within the first year. How will we decide which organisations and international development efforts going forward to support as well?

Mr Deputy Speaker, second, we must also carefully assess the sustainability of Singapore’s efforts to contribute to international development efforts. This applies especially when Singapore is asked to contribute monetary resources, in addition to the other specialised capacity building programmes that we run for government officials, representatives of non-governmental organisations (NGOs) and other organisations. The Enhanced Technical Assistance Package for the Palestinian Authority is one example of the latter programmes that Singapore provides and has been useful.

When countries including Singapore made a round of pledges to the IMF’s PRGT back in 2012, the IMF estimated that these additional resources would be able to sustain the PRGT lending to impoverished countries for two decades. Yet, today we need another injection into the PRGT. Would the PRGT eventually reach an amount that is self-sustaining, or will continual injections be required?

In a 2024 IMF policy paper, one of the reasons given for the fundraising need is that there has been a post-COVID-19 surge in requests and demand for financial assistance by countries. Has this post-COVID-19 demand abated? When do we expect it to abate? Or do we expect this to set a new norm for the level of financial assistance expected by developing countries?

The present Motions propose that the maximum amount of grants that MAS may give to the PRGT is 21 million SDR, or approximately US$28.6 million. Is this limit inclusive of the previous amount of 14.5 million SDR, approximately US$20 million, that this House passed in a 2016 Motion?

More broadly, how have Singapore’s past contributions been utilised and how does our cumulative contribution compare with countries of similar size or income levels? Does our support translate into enhanced participation or influence in IMF committees, programme design, or technical assistance priorities?

Mr Deputy Speaker, Sir, given that these grants are ultimately made through the MAS, I would also like to seek clarification on how such contributions are treated from a reserves-management and balance-sheet perspective. I am aware that Minister of State Alvin Tan has shared some parts of it earlier, but please indulge me in some questions on this front.

First, can the Minister of State clarify whether these grants are funded from MAS’ investment income or operating surpluses, and I think Minister of State Alvin Tan has mentioned that they do involve some direct draw, may not involve draw from Singapore’s OFR. This may need further clarification from Minister of State.

Second is, how are these contributions accounted for within MAS’ balance sheet and what safeguards are in place to ensure that repeated contributions do not lead to structural erosion over time? Third, at what point, if any, would the cumulative size or frequency of such contributions be considered material from a reserves-management perspective, and does MAS apply internal thresholds or stress scenarios in this regard?

Finally, can the Minister of State confirm whether these contributions fully comply with our constitutional and statutory framework governing Singapore’s reserves, including the protection of past reserves?

Mr Deputy Speaker, in addition, MAS' recent media release on 28 January noted that Singapore will also support the IMF’s Resilience and Sustainability Trust (RST) through a loan arrangement, rather than a grant, which is separate from what is requested from this Motion. But as the RST is designed to provide longer-term financing for climate and structural resilience, can the Minister also clarify whether MAS expects Singapore’s loan exposure under the RST to grow over time and what internal limits or review mechanisms are applied to ensure that such commitments remain consistent with our overall reserves-management framework?

These clarifications would help assure Singaporeans and Members of this House that while we remain a responsible global citizen, we continue to exercise prudence and discipline in managing our national resources.

Third, Mr Deputy Speaker, we must heighten awareness among Singaporeans of our international assistance efforts – what we are doing, why do we do it and how are we doing it. This is especially since not many people would read the Government Gazette, where the Government is required to publish the key information of the assistance provided to the IMF under our Bretton Woods Agreements Act. While MAS would issue media releases for each of our contributions to ensure greater transparency and accountability, I am not sure how effective these media releases would be in reaching ordinary Singaporeans.

Getting our citizens’ buy-in is important because there may be sentiments that we should help ourselves before helping others. In many other countries, this bitterness at “what could have been” has led to the rise of far-right movements and politics. These ideologies, which encompass xenophobia and identity politics, are deeply divisive and have triggered violence many a times.

In this regard, I have a few suggestions. One, can we give more weight to the role of these international organisations and Singapore’s relationship with them in our national education syllabus? Speaking to Singaporeans today, some of them are surprised or unaware that Singapore had actually been a huge beneficiary of World Bank assistance when we were building from Third World to First. Second, we can celebrate these organisations and the work they do in more public roadshows or commemorative events. This is especially since we host many of these international organisations in Singapore, such as the IMF-Singapore Regional Training Institute and the IMF Resident Representative Office.

Mr Deputy Speaker, today, Singapore is in a privileged position to be able to contribute to help lower-income countries in their development. But beyond contributing financial resources in a prudent manner, we should also consider how Singaporeans can participate in the development and implementation of international assistance programmes on the ground. More and more Singaporeans are in fact interested in making a real difference to our world, as exemplified by Singapore charity Rahmatan Lil Alamin Foundation’s efforts for Gaza.

Mr Deputy Speaker, Sir, notwithstanding the clarifications, I support both Motions.

Mr Deputy Speaker: Assoc Prof Jamus Lim.

5.29 pm

Assoc Prof Jamus Jerome Lim (Sengkang): Mr Deputy Speaker, as many in this House are aware, I was for many years an employee at the Bretton Woods Institution, with which these two Motions are associated. I declare, however, that while I maintain personal and professional relationships with staff at the World Bank, as well as a small balance in its retirement fund, I have no ongoing financial interests in the institution. This speech is therefore delivered in my capacity as a Singaporean Parliamentarian.

The Motions seek approval for grant support from the IMF's PRGT to the tune of around S$36 million for the trust fund, and a little less than $8 million for Sudan. The fund has been engaged in poverty reduction work for several decades now, and while I personally find that this smacks of mission creep, especially relative to its mandate versus the World Bank, I will concede that helping one of the poorest nations on earth need not be limited to the actions of one international agency alone.

In previous Motions of this nature, I had argued in favour of transferring some of our additional surplus quota contributions to other countries that are in need, and this Motion is precisely along those lines. For this reason, I support the Motion.

My contribution to this debate is threefold. First, I will seek more clarity on the choice of parameters for support; econd, I hope to obtain some additional context for the historical disbursements to the PRGT; and third, I will return to my call for a more institutionalised system for our nation's foreign assistance.

My first clarification has to do with the $36 million and $8 million sort. As Minister of State Tan shared, the amount for the PRGT contribution was conveyed by the IMF and as is typical, is consistent with our nation's quota subscription at the institution.

The amount for Sudan, under the auspices of the HIPC Initiative, is also presumably a proportional contribution to the total amount of debt relief that the country seeks. Still, I wish to ascertain that this is indeed how these specific amounts will arrive there.

Second, I have no doubt that Sudan is in severe need for debt relief, with a gross domestic product (GDP) per capita of about $1,250, the country is one of the poorest worldwide. The nation is faced with a debt of close to 2.5 times its annual income and recent analyses strongly suggest that this amount is unsustainable. Still, there are 39 countries listed on the HIPC list. This includes countries that are poorer, such as Afghanistan, Burundi, Malawi, as well as those with equally crushing debt burdens, such as Eritrea.

And while all but two countries on the HIPC list have previously enjoyed that relief, Eritrea, like Sudan, have not. I would therefore like to understand the premise behind the selection of Sudan as the beneficiary of this round of relief. Of course, this may well have been recommended by the staff of the Fund, but as donors, I believe that it is incumbent on us to also question the institution's rationale.

I am also aware that the amounts constitute maximums, which in principle, may turn out not to be fully assessed. To this end, I note that as of 2025, Singapore's pledges to the PRGT amounted to $1.25 billion. However, it is uncertain whether this amount has been fully disbursed. Would the Minister of State clarify the status of the prior pledged amounts, specifically, has part or all of the earlier $1.25 billion been drawn down already, which justifies this additional injection?

Relatedly, how do the current grants relate to our earlier commitments? After all, $36 million is a minuscule share, just about 3% of the prior $1.25 billion pledge. Why not simply tap on the earlier pool if it has not been paid out in full? Or are the two buckets materially different, insofar as the $1.25 billion was a pledge that could be called on, whereas the present monies are grants that will, for sure, be tapped?

Finally, Mr Deputy Speaker, I return to my call first made more than three years ago that our official foreign development assistance be institutionalised. The step would not even entail that much of a budgetary impact. This would simply collect our routine IMF and International Development Association subscriptions but also include a modest budget for a development fund to extend ad hoc aid, especially in the wake of economic crises or natural disasters.

To avoid frivolous disbursements, we can roll over annual budget subscriptions that remain unspent with no stipulation to exhaust funds in any given year. Such a move would step away from arbitrary allocations and idiosyncratic motions, and subject such funding to our standard, and in my view, more professional budget scrutiny mechanisms, such as the Public Accounts Committee and the annual report of the Auditor-General.

Sir, I previously explained, we have a history of efficiently running public agencies, which has plagued other agencies of this nature elsewhere and if run effectively, it will serve to further enhance our soft power in a global geopolitical environment where such power is in short supply, yet sorely needed.

Mr Deputy Speaker: Mr Ng Shi Xuan.

5.35 pm

Mr Ng Shi Xuan (Sembawang): Deputy Speaker, Sir, I support both Motions before the House, relating to grants to the IMF's PRGT and the trust supporting Sudan's debt relief. My remarks focus on how these grants are controlled and what Singapore expects in return. I will make four brief points.

Unlike some IMF arrangements that involve lending or reserve assets, these two Motions involve grants, which are not repaid. The amounts are capped, specified and approved by Parliament, which is appropriate. But it is still important to be clear that these are direct transfers of public funds, not investments or loans.

Can the Government clarify whether grants of this nature are expected to be occasional and case-specific, or whether they are likely to become regular or automatic over time? And what principles are used to keep them limited in size and scope?

Second, on whether Singapore is doing more than its fair share. We understand that these grants sit outside domestic spending and do not reduce what Ministries receive through the Budget. Even so, Singaporeans may reasonably ask whether Singapore is giving more than others at a time when many countries are turning inward.

Despite this narrative, as Minister of State Tan has shared, many countries are still contributing to these IMF trusts. That suggests countries still see value in doing so. But the question is whether Singapore's share is reasonable. Can the Government share how much other countries are contributing to these two trusts and how Singapore's contribution compares with theirs?

Third, on what changes on the ground and how this is monitored. For the PRGT, and especially for Sudan's debt relief, Singaporeans will want to know what these grants are meant to achieve and whether there are adequate safeguards governing their use.

Sudan does not have strong institutions and is embroiled in ongoing conflict. Debt relief may be necessary, but it also carries risks if money is not used properly. Does the governance structure ensure that the money is used where it is most needed? And will contributors receive updates on how the funds are used and what outcomes are achieved?

Fourth, on flexibility if Singapore's own budgets come under pressure. While these grants are modest, they are still public funds. It is therefore reasonable to ask what flexibility Singapore has, if fiscal conditions tighten in the future. If Singapore faces tighter budgets, what options do we have to pause, reduce or recover overseas commitments, whether in the form of grants or loans, and how are these decisions made? Sir, I look forward to the Government's response.

Mr Deputy Speaker: Mr Lee Hong Chuang.

5.39 pm

Mr Lee Hong Chuang (Jurong East-Bukit Batok): Mr Deputy Speaker. I will begin my speech in Mandarin, followed by English.

There is a great philosopher Mencius who once said, "大舍前,齐天下". What it means is, "When successful, help the whole world." It means that once you have strength or prosperity, you should assist others. The underlying philosophy is that prosperity should lead to long-term stability, including for oneself.

(In Mandarin): Mr Deputy Speaker, I support the motion to provide grant to IMF's Poverty Reduction and Growth Trust (PRGT).

At its core, this motion is not merely about an overseas financial commitment. It is about the kind of global partner Singapore chooses to be in an increasingly uncertain and volatile world. On the surface, this is resource support; at a deeper level, it reflects how we view risks, and how Singapore positions itself in an uncertain environment.

I believe that supporting the PRGT is sound in principle, necessary in overall assessment, restrained and measured in the use of public funds and aligns with Singapore's long-standing position of supporting multilateral systems and international cooperation.

Singapore is a small, open economy. Our prosperity depends on global stability, open trade and a resilient international financial system. When low-income countries are hit by shocks, whether from pandemics, climate events, debt distress or conflict, the effects do not remain local. They spill across borders through disrupted supply chains, financial volatility and regional instability. These risks can come fast, ultimately affecting jobs, investment and confidence here in Singapore, especially for SMEs.

The PRGT plays a critical role by providing timely and concessional financing to vulnerable economies at the onset of crisis. This helps countries stabilise their macroeconomic conditions, protect essential social spending and undertake necessary reforms, preventing local crises from escalating into systemic ones. Seen this way, support for the PRGT is not simply aid; it is a form of early risk prevention.

Mr Deputy Speaker, some may ask why this support should be channelled through the IMF and the PRGT. The answer lies in the strength of the mechanism. IMF programmes are grounded in rigorous assessment, clear policy conditions and strong monitoring, ensuring that funds are used to restore stability and confidence.

Meanwhile, IMF also has ability to mobilise resources quickly and coordinate internationally, an essential capability during cross-border crises. In addressing international balance of payments and financial crises, IMF's expertise enables relevant arrangement can be implemented under stress. The concessional nature of the PRGT allows low-income countries to stabilise their economies without sacrificing people's basic needs.

Mr Deputy Speaker, supporting the PRGT is also consistent with Singapore's long-standing commitment to a rules-based multilateral system. As a small state, we understand the value of clear rules. They make things predictable and allow small nations to have space and sense of security in the system. Our approach to international cooperation has always emphasised effectiveness, responsibility and systemic impact. Supporting PRGT reflects those principles.

Of course, we must also address domestic concerns. It is understandable that some Singaporeans may ask why we should support efforts overseas when there are domestic needs.

There are three points I would like to mention. First, our contribution is measured and controlled, and its impact is amplified through a multilateral framework. Second, this is not a zero-sum choice, external stability directly supports Singapore's economic resilience, investment and employment. Third, our own experience shows that external shocks can spread rapidly. Helping others stabilise their economies reduces the spillover risks that could otherwise reach our shores.

Mr Deputy Speaker, today, many low-income countries face the combined pressures of high debt, weak growth and limited fiscal space. Without concessional financing, they may be forced into sharp cuts to essential services or disorderly defaults, creating broader financial and social instability. The PRGT is a vital tool to prevent such outcomes and to safeguard international financial stability by helping countries to stabilise their fundamentals at the most difficult times.

(In English): Mr Deputy Speaker, in English, please. At its core, this Motion is not merely about an overseas financial commitment. It is about the kind of global partners Singapore choose to be in an increasingly uncertain and volatile world.

Singapore is a small, open economy. Our prosperity depends on global stability, open trade and a resilient international financial system. When low-income countries are hit by shocks, whether from pandemic climate events, debt distress or conflict, the effects do not remain local. They spill across borders through disrupted supply chain, financial volatility and regional instability.

These risks ultimately affect jobs, investment and confidence here in Singapore. The PRGT plays a critical role by providing timely and concessional financing to vulnerable economics at the onset of crisis. This helps countries stabilise their macroeconomics condition, protect essential social spending and undertaking necessary reforms, preventing local crisis from escalating into systematic ones.

Seen this way, support from the PRGT is not simply about aid. It is a form of early risk prevention.

Mr Deputy Speaker, some may ask why this support should be channelled through IMF and the PRGT. The answer lies in the strength of the mechanism. IMF programmes are grounded in rigorous assessment, clear policy conditions and strong monitoring, ensuring that funds are used to restore stability and confidence. The IMF also has the expertise and ability to mobilise resources quickly and coordinate internationally, and essential capability during cross-border crisis.

Importantly, the concessional nature of the PRGT allowed low-income countries to stabilise their economics without sacrificing basic healthcare, education or social needs. Supporting the PRGT is also consistent with Singapore's long-standing commitment to a rules-based multilateral system. As a small state, we understand the value of clear rules, accountability and predictable frameworks. Our approach to international cooperation has always emphasised effectiveness, responsibility and systematic impact. This contribution reflects those principles.

It is understandable that some Singaporeans may ask why we should support efforts overseas when there are domestic needs. There are three points I would like to mention here.

First, our contribution is measured and controlled, and its impact is amplified through a multilateral framework. Second, this is not a zero-sum choice. External stability directly supports Singapore's economic resiliency and employment. Third, our own experience show that external shocks can spread rapidly. Helping others stabilise their economy reduces the spillover risks that could otherwise reach our shores.

Today, many low-income countries face the combined pressures of high debt, weak growth and limited fiscal space. Without concessional financing, they have to be forced into shortcuts to essential services or disorder defaults, creating broader financial and social instability. The PGRT is a vital tool to prevent such outcomes and to safeguard international financial stability.

Mr Deputy Speaker, this Motion reflects a long-term strategic judgement rather than a short-term gesture. Like in Mandarin, they say, "共同发展才能长久繁荣". Only through shared development that lasting prosperity can be achieved. For this reason, I support the Motion.

Mr Deputy Speaker: Mr Lee, I hope you will get back your voice very soon. Mr Shawn Loh.

5.50 pm

Mr Shawn Loh (Jalan Besar): Mr Deputy Speaker, I hope I also do not lose my voice. But I definitely support both Motions.

Singapore has long benefited from today’s global order, which was built on multilateral institutions, such as the United Nations, the World Bank and the IMF. It is this global order that has pretty much allowed us to earn our living in the world.

Our externally oriented economy can grow faster, and Singaporeans can access opportunities better, when global trade and financial flows increase and when more of such global flows flow through Singapore. This takes place when there are clear rules that countries abide by. It also takes place when more countries around the world experience economic development, financial stability and are plugged into the global economy.

[Mr Speaker in the Chair]

It is therefore in our national interest to ensure that the global economic environment remains conducive for Singapore to earn our good living, way into the future. For now, these multilateral institutions help us to do so. As responsible members of the global community, we have been contributing our fair share. I would, however, like to raise three points.

First, can the Government track where Singapore’s contributions are used so that we can find ways to deepen economic relations with these countries? This would help both sides enjoy economically stable, win-win relations. And Singaporean companies can also benefit.

Second, as noted by my colleague, Mr Saktiandi: although not required for Parliamentary approval, MAS has updated that 746 million of SDR will be loaned to the IMF’s RST.

This does not seem like a small sum in both absolute terms and as a proportion of our total SDR on our balance sheet. According to the IMF’s website, only 23 countries have contributed to this trust. Coincidentally, it is equivalent to around US$1 billion, the same fee to have a long-term seat on the US’ Board of Peace, although the contribution to IMF’s trust would be a loan, whereas the Board of Peace requires an expense. As a loan, it remains as an asset on MAS’ balance sheet. Can the Government share more about the mechanism of this loan to the IMF and whether there are any risks from this loan?

Finally, and most importantly for the long term, I hope the Government can address the bigger question, the elephant in the room. I am not so sure compared to my other Parliamentary colleagues: what should Singapore’s long-term strategy be, given the emergence of a more fragmented world order, divided into more adversarial blocs and driven by self-interest among states?

We should not be naive. Countries will always be self-interested. It is almost always “me first”. And blocs will always form and disperse. We have seen this in the Non-Aligned Movement of the 1950s, the formation of BRICS in the 2000s and so on. But in most instances in the past, these blocs were combinations of developing countries and middle powers, attempting to challenge incumbent multilateral institutions and an order underpinned by developed countries, first and foremost among them, the US.

But now, things seem different. The challenger is not another bloc of developing countries. It is the US itself, rebalancing its interests vis-à-vis these multilateral institutions.

We should therefore expect institutions like the IMF to come under extreme stress. Perhaps, they will even be unable to perform the key, international functions they were set up to do, such as development support or liquidity in times of global crises.

Some of our colleagues in the House have assumed that they will continue to do so in the future. I am not so sure. For example, consider the unthinkable. What if some member countries refuse to honour their obligations to supply their currencies as required by the Special Drawing Rights?

How should we respond to these new developments based on our own national interest? Should we capitalise on the opportunity to take a larger role in re-shaping existing multilateral institutions? Or should we capitulate and follow the herd of other countries looking out for their own immediate self-interest, potentially re-organising into new blocs? Or should we just carry-on assuming business-as-usual?

Mr Speaker, I do not expect the Government to provide a comprehensive answer at this juncture. But I thought to leave these questions as food for thought. Because as the old adage goes, if we do not have a seat at the table, then we might find ourselves on the menu. I support the Motion.

Mr Speaker: Mr Victor Lye.

5.57 pm

Mr Victor Lye (Ang Mo Kio): Mr Speaker, I rise in support of the Motions to approve Singapore’s grants to IMF’s PRGT and the PRG-HIPC Trust under the HIPC Initiative.

The key point is that, to many Singaporeans, these may sound very foreign and very distant. But they are indeed relevant to us because Singapore is a small, open economy, deeply connected to the global trade, to global markets and global supply chains.

The key point is that when fragile economies collapse, the impact does not remain overseas. Such shocks and financial crises can quickly affect prices, jobs and business confidence in Singapore. Therefore, supporting these IMF trust funds is a form of reducing the likelihood of global shocks that would otherwise raise costs for households and businesses in Singapore.

That said, I recognise that Singaporeans may have concerns. So, I seek three clarifications.

First, I seek to clarify that these grants do not constitute a drawdown of Past Reserves, and they do not trigger the Reserves spending threshold. That they are funded from current resources and that no Reserves are being touched.

Second, that these contributions do not replace or reduce domestic spending on healthcare, housing, education or cost-of-living for Singaporeans. That they are budgeted expenditures alongside and do not compete with our domestic priorities.

Third, that these grants are not bilateral transfers to an individual government but are channelled through established IMF trust funds with clear governance, accountability and oversight.

Mr Speaker, Singapore has long benefited from a stable, rules-based multilateral system. For a highly trade-dependent economy like ours, supporting global financial stability is a matter of national economic interest. At a time when commitment to multilateral rules is understrained globally, supporting well-governed institutions like the IMF is especially important for small states that rely on predictability rather than power. So, for these reasons and with the clarifications I have stated, I support the Motions.

Mr Speaker: Minister of State Alvin Tan.

5.59 pm

Mr Alvin Tan: Mr Speaker, I thank Members for speaking and supporting the two Motions.

Members have highlighted the importance for Singapore to contribute to the IMF and to help other vulnerable economies, especially in today’s volatile and fragmented global environment. Let me address some of the questions they have raised in the debate.

First, they have asked whether Singapore should continue contributing to the international community in the current global environment. Mr Saktiandi Supaat and Mr Shawn Loh asked about Singapore's strategy in a more fragmented world and our interests as part of the global and international community.

I agree with them. We do indeed face a very different global operating context today, with multilateralism under threat amid wars, rising protectionism and intensifying geopolitical tensions. Prime Minister Wong had emphasised that even as multilateralism comes under threat, Singapore must do our part to preserve multilateral frameworks that matter and to lay the foundation for a more stable global order to emerge in the years ahead.

Mr Lee Hong Chuang put it well: this Motion concerns not just a financial commitment. It is about the kind of global partner Singapore chooses to be.

And it is against this backdrop that Singapore must and will continue to support key multilateral institutions, such as the IMF. As a small city-state with an open economy and a global financial centre, Singapore has a strong interest in the continued stability of the international monetary system, which the IMF plays a principal role in safeguarding. I would also like to add, Mr Speaker, that the IMF's mandate and functions continue to receive broad support from across its 191 member countries, including that of its larger members.

Mr Saktiandi also asked how the Government decides which organisations or international efforts to support. The Government assesses each organisation on its merits.

Mr Saktiandi and Mr Ng Shi Xuan both asked how Singapore's contributions compare to other countries. Over 40 countries have so far pledged to the PRGT and more than 120 countries have pledged to the PRG-HIPC. The US and Japan have pledged to contribute to the PRG-HIPC as well. In our region, other than our ASEAN counterparts, China and Korea have also pledged contributions.

Assoc Prof Jamus Lim asked how the amounts are ascertained. Sir, IMF's requests for members' contributions are generally commensurate with countries' respective quota shares. It is a point I made earlier on. These quota shares are determined by a country's relative position in the global economy, using a set of indicators comprising GDP, openness, economic variability and international reserves. Naturally, countries with larger quota shares are expected to contribute more.

Assoc Prof Lim also asked whether our earlier contributions had been drawn down. Sir, our past contributions add to the common pool of resources for the PRGT and it is not attributable to individual contributing members.

Mr Saktiandi also asked about the PRGT's self-sustainability. The IMF aims for the PRGT to be financially self-sustainable in the long run. In recent years, this has been challenging as overall demand for PRGT funding remained higher compared to demand pre-pandemic. This round of contributions is targeted at getting the PRGT closer to its goal of self-sustainability.

The IMF has also approved a comprehensive package of policy reforms and financing measures. These reforms naturally need time to implement and to be assessed for its efficacy. This is to ensure that the PRGT's long-term self-sustainability may be reached.

On a related note, Mr Ng Shi Xuan and Mr Saktiandi Supaat asked about future IMF grant requests.

IMF's fundraising requests are informed by periodic assessments of the demand for its various facilities and initiatives. This in turn rests on the state of the global economy and the financial system, and the needs of poor and vulnerable members.

Singapore last contributed to the IMF in 2016 and 2021, which the Members have alluded to, and these were brought to Parliament for approval. For any further request for financial assistance, MAS will carefully assess on a case-by-case basis the merits of the request and if the requested amount is reasonable. All proposed contributions to the IMF will also be assessed against the conditions under the Bretton Woods Agreements Act.

Mr Saktiandi also asked about the financing and reserves implications of the contributions. The proposed limit does not include the previous contribution to the PRGT. The current limit of 21 million SDR that is before Parliament is a separate contribution. We previously contributed 14.5 million SDR to the IMF in 2016, following Parliament's approval.

On reserves implications, which Members have raised, the proposed amount to the PRGT that will affect our OFR, as I mentioned in my original speech, is negligible relative to the size of MAS' OFR. The amount should be assessed against the backdrop of the 3.73 billion SDR that Singapore was allocated in the IMF's 2021 SDR General Allocation. I also mentioned that earlier.

MAS takes into consideration the contribution request relative to the size of MAS' OFR. Our past contributions have not impeded MAS in carrying out its mission of ensuring monetary stability, nor do we foresee the current contributions impacting MAS' mission.

Mr Victor Lye and Mr Saktiandi Supaat both asked if the grants will draw on our past Reserves or reduce domestic spending for Singaporeans. This set of contributions does not draw on our past Reserves, nor will it affect or reduce any domestic expenditure for Singaporeans.

Mr Ng Shi Xuan, Mr Victor Lye and Mr Shawn Loh asked about governance and accountability. The IMF has institutionalised a set of procedures for the use of financing facilities. These involve safeguards, oversight and approvals by the IMF Executive Board, which represents the membership of the IMF.

Singapore is represented on the Board through the Southeast Asia Voting Group. The IMF also imposes conditionalities on members' use of its financing facilities, requiring members to put in place appropriate programmes and implement reforms that will improve their macroeconomic conditions. The IMF has also a preferred creditor status and borrowing countries are expected to repay the IMF before other creditors. In addition, IMF regularly updates member countries, including Singapore, on the status and utilisation of our grant contributions.

Sir, Assoc Prof Jamus Lim had also asked about the choice of Sudan under the PRG-HIPC initiative over other highly indebted countries. The IMF had provided debt relief to 38 out of the 39 eligible countries that Assoc Prof Lim had mentioned. Of which, Sudan is the last country to be eligible under this initiative. The IMF has a framework for countries to qualify for debt relief under this HIPC initiative. For instance, satisfactory performance under the programmes, implementation of the poverty reduction strategy and key structural reforms.

Mr Loh also asked about the mechanism of Singapore's loan to the IMF's RST. This is included in MAS' media release last Wednesday. The RST is an IMF-administered loan-based trust to help low-income and vulnerable middle-income countries build resilience to external shocks and to ensure sustainable growth. It contributes to their longer-term balance of payment stability. After this Trust was established in 2022, the IMF sought contributions from 35 member countries with strong external positions, including Singapore.

Last Wednesday, the IMF announced that Singapore will channel 746 million SDR from the 2021 SDR allocation to the RST. We will join 22 other countries in supporting the IMF to meet its initial fundraising target of 33 billion SDR.

The contributions to the RST are considered loans and other financial assistance under the Bretton Woods Agreements Act, which do not require Parliament's approval. Mr Shawn Loh rightly pointed out that loans will continue to be recognised as assets on MAS' balance sheet and are not expenses – in contrast to the two grants that we are tabling today.

Mr Loh also asked about the risks associated with this contribution. When Singapore provides a loan in support of an IMF programme, such as the RST, for the benefit of one or more countries, we are providing the loan to the IMF and entering into an agreement with the IMF. So, we take on the credit risk of the IMF, which is low, instead of the direct credit risk of the countries that the IMF lends to.

As I shared earlier, the IMF has formal procedures for the use of its financing facilities, with safeguards and approvals, and conditionalities on members' use. As the IMF enjoys preferred creditor status, loans granted by the IMF must be repaid ahead of all other creditors.

The IMF, with the advantage it has from its preferred creditor status and the sizeable reserves it can use to protect its members, has always repaid its own creditors. In addition, member countries' loans to the IMF under the RST are remunerated at the SDR interest rate.

To Mr Saktiandi Supaat's question on the loan exposure under the RST, the recent contributions to the RST announced is a once-off. Any future requests will be similarly carefully considered on a case-by-case basis. As I highlighted earlier, our considerations will be based on the merits of the request, whether the amount sought is reasonable and, as Mr Saktiandi Supaat mentioned, the implications for our reserves.

Mr Ng also asked about the options Singapore can exercise in the event of budgetary constraints. Singapore's loan agreements with the IMF include a safeguard that the IMF is obliged to immediately repay the loan in the event Singapore has a balance of payments need.

I also thank Assoc Prof Jamus Lim's support for these Motions and his call for Singapore to do more. He has made this call in previous Sittings. It is in fact the sentiment that many of us share.

We want to be a force for good in the world. I think it is heartening that Parliament has expressed that. Indeed, Singapore has benefited from funding provided by the World Bank in the early years of our infrastructural development, which Mr Saktiandi had mentioned earlier on.

But even as we want to do good, we need to take a balanced approach. Our resources, as we have articulated many times in this House, are not infinite. Every dollar we commit abroad must be weighed against our needs at home – for our seniors, for our healthcare and our social safety nets. As I shared earlier, our contributions to the IMF are fair in that they are pegged to our quota share and assessed to be reasonable. It does not require Singapore to overextend ourselves even as we do good.

Assoc Prof Jamus Lim made a suggestion that he has made previously about institutionalising foreign international assistance. Our approach first looks at what is commensurate with Singapore's resources, and which best leverages our specific strengths.

Last year in April 2025, the Prime Minister announced the new unit in the Ministry of Foreign Affairs, then called the Development Partnership Unit and now the Development Strategy Unit, to coordinate efforts across Government agencies to strengthen coordination and collaboration and focus on areas where Singapore can make a meaningful impact.

We continue to extend capacity building and skills training to developing countries through our Singapore Cooperation Programme (SCP). To date, over 160,000 officials from 180 countries have attended our SCP.

In other areas, we have also delivered international aid across the world, such as for Cyclone Ditwah in Sri Lanka last year and most recently, to Gaza. We are also a founding member of the Asian Development Bank (ADB) and the World Bank. We have used our unique position as a hub to be a force multiplier, hosting multilateral institutions, such as the ADB, the World Bank, the International Energy Agency, and as Mr Saktiandi pointed out earlier, the IMF-Singapore Regional Training Institute and the IMF Resident Representative Office.

In fact, we are doing more, but in a way that is effective, that makes the best use of our strengths and ultimately, that is in Singapore's best interests.

Finally, Mr Speaker, Sir, I thank Mr Saktiandi Supaat for his suggestions to better inform Singaporeans of our IMF contributions through national education and also profiling the work of international organisations.

We had discussed this particular point in the last debate in this House in 2021, as I have explained in my speech earlier. We will put out additional public communications, such as social media posts and others, on this. In fact, it is indeed important that Singaporeans appreciate, like Members of this House, the external environment we are in today and how that shapes Singapore's stature and posture in supporting and contributing to relevant multilateral initiatives.

Mr Speaker, Sir, I believe I have addressed the queries from the Members and I thank Members – Member Jamus Lim and Members of the GPC for Finance and Trade – for their support. Mr Speaker, I beg to move.

6.14 pm

Mr Speaker: Are there any further clarifications for Minister of State Tan? Looks like there is none.

Question put, and agreed to.

Resolved, "That this Parliament, in accordance with section 6A(2)(d) of the Bretton Woods Agreements Act 1966, resolves that the maximum amount of grants that the Monetary Authority of Singapore may give under the bilateral agreement (or its subsequent variations) to be made by the Monetary Authority of Singapore (on behalf of the Government of the Republic of Singapore) with the International Monetary Fund to support the Poverty Reduction and Growth Trust, is 21,000,000 Special Drawing Rights (approximately US$28,600,000)." – [Mr Alvin Tan]