More companies paid bills promptly in Q2

SINGAPORE – More companies in Singapore paid their bills on time in the second quarter of this year compared to the first three months, buoyed by the positive impact of increased Chinese tourist arrivals on the retail sector and the better performance of certain manufacturing sectors such as pharmaceuticals and electronics.

Overall prompt payments - where 90 per cent of bills are paid within agreed credit terms, increased to 45.92 per cent in the second quarter from 41.11 per cent in the first quarter, data from the Singapore Commercial Credit Bureau (SCCB) showed on Monday (July 4). However, on a year-on-year basis, prompt payments slumped to 45.92 per cent in the second quarter from 48.47 per cent in the corresponding period last year.

Slow payments - where more than 50 per cent of bills are paid later than the agreed credit terms - fell to 42.61 per cent in the second quarter from 46.58 per cent in the first quarter. On a year-on-year basis, however, slow payments increased to 42.61 per cent in the second quarter from 41.35 per cent in the corresponding period last year.

According to the SCCB, slow payments improved across all five sectors – construction, manufacturing, retail, services and wholesale - from the first quarter, when all five suffered a deterioration in payments.

“We have seen marked improvements in the payment delays of local firms, particularly in both retail and manufacturing. This is due largely to the spillover effects of an increase in tourist arrivals, mainly from China in the first half of the year, as well as a reversal in certain segments of the manufacturing sector such as pharmaceuticals and electronics clusters.” said Ms Audrey Chia, CEO of D&B Singapore, which monitors and compiles the figures through the SCCB.

Both the manufacturing and retail sectors experienced the largest year-on-year declines in slow payments of 9.17 percentage points and 6.22 percentage points, respectively, the SCCB data showed.

“However, due to a prolonged weakness in external trade and a softening in the business services sector, quarter-on-quarter improvements in payment performance for both wholesale and services sectors were relatively marginal compared to the other sectors. Hence, firms will have to continue to exercise credit vigilance before extending credit terms to their business partners.” added Ms Chia.