Mitigating Cumulative Impact of Inflationary Pressures from General and Specific Price Increases

80 Mr Derrick Goh asked the Minister for Finance in view of the higher-than-expected inflation of 3.8% reported for November 2021, what actions are taken to further mitigate the cumulative impact of inflationary pressures stemming from general and specific price increases, including higher expected borrowing costs on households and businesses, for the middle- to lower-income Singaporeans and small businesses.

Mr Lawrence Wong: Mr Derrick Goh asked about mitigating the impact of higher expected borrowing costs on households and businesses.

Mortgages form the bulk of most households’ liabilities. Measures put in place before the recent rise in inflation had ensured that household balance sheets were in a relatively healthy position. Credit measures, including the total debt servicing ratio, or TDSR, which was tightened recently, ensure that households borrow prudently and can continue to service their mortgages over the medium term.

For businesses, the Temporary Bridging Loan Programme (TBLP) and MAS’ Singapore Dollar (SGD) Facility for Enterprise Singapore loans will be available till March 2022. This combination of support measures has helped eligible SMEs to borrow at lower interest costs than even pre-pandemic levels. TBLP loans are offered at fixed interest rates, capped at 5% per annum. The Government will monitor the situation closely to ensure businesses continue to have access to credit.