Debt threat: Slow payments among local firms on the rise

They account for over two-fifths of payment transactions in 3Q.

Payment performance of local firms deteriorated strongly year-on-year (y-o-y) in Q3 2016 compared to the same quarter in 2015. Prompt payments which accounted for slightly more than half of total payment transactions in Q3 2015 tumbled to slightly over two-fifths of payment transactions in Q3 2016.

Slow payments have also risen markedly, accounting for more than two-fifths of payment transactions in Q3 2016.

According to Singapore Commercial Credit Bureau (SCCB)’s latest payment statistics, prompt payments deteriorated strongly by 8.87 percentage points from 51.05 per cent in Q3 2015 to 42.18 per cent in Q3 2016.

Y-o-y slow payments have also deteriorated similarly by 8.06 percentage points from 38.31 per cent in Q3 2015 to 46.37 per cent in Q3 2016.

On a quarter-on-quarter (q-o-q) basis, prompt payments dipped by 3.74 percentage points from 45.92 per cent in Q2 2016 to 42.18 per cent in Q3 2016. Slow payments inched upwards by 3.76 percentage points from 42.61 per cent in Q2 2016 to 46.37 per cent in Q3 2016.

Meanwhile, y-o-y partial payments edged up by 0.80 percentage points from 10.65 per cent in Q3 2015 to 11.45 per cent in Q3 2016. On a q-o-q basis, partial payments slipped slightly by 0.03 percentage points from 11.48 per cent in Q2 2016 to 11.45 per cent in Q3 2016.

From a sectoral perspective, q-o-q slow payments have deteriorated across all five industries. This stands in contrast to Q2 2016 when improvements in slow payments were visible across all 5 industries. Y-o-y payment delays have also jumped markedly for all 5 industries.