MOF puts up more information on S’pore reserves
As the debate over Singapore's reserves continues between several Presidential hopefuls, the Ministry of Finance (MOF) has released more information on the reserves on its website.
In its "Frequently Asked Questions" page, the MOF has addressed another seven questions such as whether Singaporean's CPF monies are safe and whether the Government of Singapore Investment Corporation (GIC) and Temasek Holdings lost their value as a result of the financial crisis.
Last month, MOF introduced a section in its FAQ page to deal with questions concerning the reserves.
In its latest update, MOF said, "All CPF monies are safe. CPF monies are invested in bonds that are issued and guaranteed by the Singapore government. The full resources of the government are backing this guarantee that CPF monies will be paid back."
It added that the government is in a strong reserves position, where "its assets far exceed its liabilities". The Net Investment Returns Contribution (NRIC) of about $7 billion is drawn from returns on assets in excess of the liabilities and not gross assets, it noted.
The NIRC recorded in the government Budget only comprises up to 50 per cent of the returns earned on the reserves, added the ministry.
On Temasek and GIC, MOF said both have "fully recovered from the global financial crisis" of 2008-2009.
"Taking the cycle as a whole - from the start of the crisis and through the recovery - both GIC and Temasek have done creditably in comparison to their international peers among major global managers. They have fully recovered their declines in portfolio values occurred during the crisis. More importantly, both GIC and Temasek have earned good returns over longer periods," said MOF.
In response to questions about Singapore's high level of government debt as reported in the CIA Public Debt Factbook, MOF said, "Our assets are much larger than our liabilities. There is not net government debt. Singapore is in fact a net creditor country, not a debtor country."
"That is why international credit rating agencies give the Singapore government the highest short and long-term credit ratings of AAA."
A ministry spokesperson told Channel NewsAsia, "MOF updates the information on our website from time to time to provide more information or to better explain our policies. The FAQ section on our reserves has been updated and expanded based on feedback we have received from the public. We will also be updating the FAQ on our other policy areas as part of our regular updating of our website."
