Date: For Parliament Sitting on 7 October 2026

Name and Constituency of Member of Parliament

Mr Saktiandi Supaat, Bishan-Toa Payoh GRC

Question

Mr Saktiandi Supaat: To ask the Prime Minister and Minister for Finance regarding sustained increases in US Treasury yields (a) how Singapore’s borrowing costs and credit availability could change; (b) which households and businesses are most exposed; (c) whether additional support is needed; and (d) how public-sector Treasury holdings’ value, income and risks could change, including those managed by MAS and GIC.

Answer by Mr Chee Hong Tat, Minister for National Development, and Deputy Chairman of MAS, on behalf of Mr Gan Kim Yong, Deputy Prime Minister and Minister for Energy, Trade and Industry (Trade), and Chairman of MAS:

1. Interest rates in Singapore are market-determined and generally track the interest rates in the major economies. They have not risen as much compared to other jurisdictions. This reflects, among other factors, Singapore’s strong fiscal fundamentals, which have supported continued healthy demand for Singapore Government Securities (SGS).

2. Singapore’s borrowing costs have remained broadly in line with historical levels. The prevailing 10-year SGS yield stands at 2.5%, compared to its 10-year average of around 2.2%. The discount of 10-year SGS to 10-year US Treasury yields has widened from about 170 basis points in January 2025 to about 250 basis points in September 2026.

3. Broader domestic credit conditions remain conducive. Three-month Compounded SORA, an important benchmark for domestic loans, is around 1.2%, below its 10-year average of 1.5%. Credit growth remains firm, credit quality is sound, and banks are well capitalised.

4. The stress tests conducted by MAS indicate that businesses and households generally remain in a sound financial position to manage higher borrowing costs.

5. Businesses and households, particularly those who are more vulnerable, should exercise financial prudence by borrowing within their means, maintain adequate liquidity buffers, and factor in the possibility of higher interest rates going forward.

6. MAS has safeguards to ensure that households do not overextend themselves when taking out housing loans.

a. The Total Debt Servicing Ratio framework caps a borrower’s total monthly debt repayments at 55% of monthly income. For specified public housing purchases, the Mortgage Servicing Ratio also caps monthly mortgage repayments at 30% of monthly income.

b. Importantly, banks assess whether borrowers can afford a housing loan at an interest rate of 4%, even when prevailing mortgage rates are lower. This provides a buffer against increases in interest rates.

c. In addition, about 60% of HDB households with outstanding loans have concessionary HDB loans. The impact of rising interest rates is mitigated by the peg of the HDB mortgage loan to the CPF Ordinary Account interest rate, which provides greater stability against movements in market mortgage rates.

7. MAS works closely with financial institutions to monitor borrowers' repayment performance and facilitate early engagement if signs of financial stress emerge. Banks may offer assistance tailored to the individual circumstances. Borrowers who anticipate difficulty servicing their loans should approach their lenders early to discuss options.

8. The Government stands ready to provide appropriate and targeted support if necessary. In September 2026, we raised our risk-share for eligible Enterprise Financing Scheme loans from 50% to 70%, improving access to working capital and project financing.

9. Singapore’s reserves are managed over a long-term investment horizon and diversified across asset classes. A gradual adjustment of yield increases will be manageable in a diversified portfolio that is held for the long-term.

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