Reply to Parliamentary Question on Singaporeans Employed in Financial Services Sector
Answer by Mr Ong Ye Kung, Minister for Transport, on behalf of Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1. I have provided most of the data Mr Chua asked for in my speech on the financial sector on 1 September. Let me do a recap here.
2. The Monetary Authority of Singapore (MAS) started compiling detailed manpower data in the sector in the last few years. Total employment in the sector grew from 149,000 in 2014 to 171,000 in 2019. So about 22,000 financial sector jobs were created over the past five years, with 15,000 going to Singaporeans. Based on MAS’ estimates, about 70% of the workforce are Singaporeans, 14% Permanent Residents (PRs), and 16% foreigners.
3. If we zoom in on senior roles, Singaporeans account for 44%, PRs 20% and foreigners 36%. The proportions vary across activities. In 2019, for senior roles in retail banks’ local functions, Singaporeans accounted for about 70%. In non-retail banks, where there is a higher concentration of regional and global functions, the proportion is lower, at about 40%.
4. But as I have explained, while the share remains stable, the absolute number of Singaporeans holding senior level positions has been growing at a healthy pace as the base has expanded. 2,600 Singaporeans now hold such positions, 900 more than 5 years ago or an increase of over 50%.
5. The member has asked for a comparison of 25th, 50th and 75th percentile salaries of Singaporeans, PRs and foreigners in the financial services sector. However, such a breakdown would not be meaningful, as we are not comparing like for like – a foreigner at the 50th percentile of foreigner’s wage levels in the financial sector could be hired for a very different role, from a Singaporean at the 50th percentile of Singaporean wage levels.
6. Notwithstanding, let me try to address the Member’s queries by taking a broad view of the data, whilst taking care of the interpretation.
- Across the financial sector, the median wage band of Singaporeans is $6,000 to $8,000, while that for PRs and foreigners are similar at $8,000 to $10,000.
- In the senior level positions, about half of Singaporeans earn above $30,000. It is the same for foreigners, while almost two thirds of PRs in the senior positions do.
- Both sets of data are as one would expect. Financial institutions very often bring in higher-earning foreigners to perform specialized, or regional and global roles, and our rules constrain the flow of those who come in at the lower end. One would also expect those with stronger profiles and track records in Singapore to be more successful in attaining PR status. In other words, these data show outcomes which reflect the fact that we regulate the inflow of foreigners, and apply selective criteria in granting PR from those who were previously foreign PMEs. If there was no regulation to control the inflow of Employment Pass holders, and no criteria and conditions for PRs based on their track records, these earning differentials will naturally narrow or disappear.
7. We should focus our minds on the essential issue, which is how we can provide the best opportunities for Singaporeans. As I explained in my speech, we do this by staying open to the expertise that we need to grow as a global financial centre, investing in Singaporeans’ capabilities at every level and by ensuring fair employment practices amongst financial institutions. MAS has been building our local talent pipeline for the financial sector and grooming more Singaporeans to be leaders and specialists, including giving them international exposure. Our local talent pool has been expanding, and we will continue to collaborate with the industry to continue this effort.