Singapore firms’ payment performance hits all-time low in 2020 amid Covid-19

SINGAPORE (THE BUSINESS TIMES) – The overall payment performance of Singapore firms hit an all-time low in 2020 amid the economic fallout from the Covid-19 pandemic.

The annual average proportion of prompt payments fell to less than half of total payment transactions to 40.74 per cent in 2020, from 49.05 per cent in 2019, the Singapore Commercial Credit Bureau (SCCB) said in a quarterly report on Tuesday (Jan 5).

The average proportion of slow payments rose to 44.72 per cent in 2020, from 37.68 per cent in 2019. Meanwhile, partial payments hit an all-time high in 2020 at 14.54 per cent, up from 13.27 per cent in 2019.

Prompt payments in the fourth quarter of 2020 inched up by 2.9 percentage points to 41.3 per cent, from 38.4 per cent in the quarter before. Year on year, prompt payments fell by 4.9 percentage points from 46.2 per cent.

Slow payments were down by one percentage point to 43.2 per cent in the fourth quarter of 2020 from 44.2 per cent in the third quarter of 2020, and increased by 3.4 percentage points from 39.8 per cent the year before.

Meanwhile, partial payments dipped slightly by 1.9 percentage points to 15.6 per cent in the fourth quarter of 2020 from 17.5 per cent in the third quarter of 2020 and rose by 1.5 percentage points from 14 per cent in the fourth quarter of 2019.

All five sectors saw slight improvements to slow payments quarter on quarter. However, slow payments deteriorated across all industries year on year.

The construction sector saw the highest proportion of slow payments – accounting for more than half of payment transactions in the fourth quarter of 2020. The remaining sectors – manufacturing, retail, services and wholesale trade – saw decreases in slow payments.

D&B Singapore chief executive Audrey Chia said: “Although the Singapore economy is expected to return to growth this year, we anticipate the continuing trend of improvement in payment performance to be gradual after hitting an all-time low in 2020.”

D&B Singapore compiled the study figures by monitoring, through the SCCB, more than 2.4 million payment transactions of firms.

Prompt payment refers to when 90 per cent or more of total bills are paid within the agreed payment terms, while slow payment refers to when less than 50 per cent of total bills are paid within the agreed terms.

Partial payment refers to when between 50 per cent and 90 per cent of total bills are paid within the agreed payment terms.