According to a Bloomberg article published today, Singapore banks are now in trouble as bad debt from the construction sector piles up. Based on survey results from credit insurance group Atradius, property developers in Singapore are expecting less timely payments in 2017. Bloomberg’s stats show that average days payable outstanding has risen to 104 from 6 two years ago.
Atradius expects 5% more construction-related companies to close down in 2017, especially so for those working in private construction developments. Singapore’s three biggest banks – DBS, OCBC and UOB – reported a combined S$779 million of bad loans from the construction sector in Sep 2014, but the situation is still as bad as of December 2016 with a reported S$685 million of bad loans.
The Singapore government is expected to respond to the country’s ailing economy with new policy proposals in the Budget this evening (Feb 20). The Budget speech will be delivered by Finance Minister Heng Swee Keat.