Ultimate Guide to Singapore's Reserves: Difference Between Past and Current Reserves

Ultimate Guide to Singapore's Reserves: Difference Between Past and Current Reserves

profileMing Feng

We have been hearing a lot about the government drawing on its reserves lately in our battle to fight COVID-19. Majority of the Singaporeans seem to be pretty satisfied at the way things are handled for now.

Some might even say No Horse Run (means it is the best).

Not literally, of course.

Singapore horse on the loose
Source: Punters.com.au

With the word reserves being thrown around often, we decide to dig deeper to find out more about the government’s reserves.

Author’s Note: We do not work for the government. There is nothing much to do at home, so I might as well feed my curiosity.

Source: giphy

Our Government’s Reserves vs COVID-19

We did a little coverage on how is the Singapore Government paying for the Unity and Resilience Budget. We went on to commit another $5.1 billion with the Solidarity Budget.

Here’s a quick breakdown on the 3 Budgets and where is the budget coming from:

 CostSome examples of where the money is goingMoney taken from where?Where else?
Unity Budget
(February 2020)
$6.4 Billion$800 Million: Ministry of Health to fight COVID-19Government Budget Current Reserves
$4 Billion: Stabilisation and Support Package
$1.6 Billion: Care and Support Package
Resilience Budget
(March 2020)
$48.4 Billion$15.1 Billion: Support 1.9 million local employees under Jobs Support SchemePast Reserves
($17 Billion)
$1.2 Billion: Self-Employed Person Income Relief Scheme (SIRS)
$48 Million: Self-Employed Person Training Support Scheme
$145 Million: ComCare
$20 Billion: Enterprise Financing Scheme (EFS) and Temporary Bridging Loan Programme (TBLP)
$350 Million: Enhanced Aviation Support Package
$90 Million: Tourism Industry
and many more
Solidarity Budget
(April 2020)
$5.1 Billion$4 Billion: Additional support for businesses and workersPast Reserves
($4 Billion)
$1.1 Billion: Solidarity Payment
Total Cost$59.9 Billion

We understand that this is confusing AF, especially when it comes to the difference between past and current reserve.


Just bear with us a bit more and we will get to the point.

Singapore's reserves. Past and current reserves

What Makes Up Singapore’s Reserves?

After deducting the liabilities of the Government, statutory board and Government company, the remaining excess assets will be the reserves.

In short,

Reserves = Assets – Liabilities

Our Assets

With little resources, Singapore’s reserves are made up of land and financial assets.

Financial AssetsCash
Physical AssetsLand
  • The reserves is being managed by Monetary Authority (MAS) and government-linked companies such as GIC Private Limited and Temasek Holdings.
  • These companies are to invest some of the reserves with the objective of generating long-term returns on assets.
  • With regards to investment decisions made by GIC, MAS and Temasek, the Government has zero influence on their decisions.

Our Liabilities

The Government’s liabilities include securities such as the Singapore Government Securities (SGS) and Special Singapore Government Securities (SSGS).

When They Tap on Reserves, Is Our Cpf Money Part of It?

Now, here comes the tough question!

Return our CPF
Source: The Straits Times

Before we start gathering at Hong Lim Park, it is important that we understand the fundamentals of our CPF system.

To give a quick answer, our CPF monies DO NOT make up our reserves.

This is because CPF monies are invested in securities (SSGS) issued and guaranteed by the Singapore Government. As mentioned above, securities such as SSGS is one of the government’s liabilities.

Hence, CPF is part of the government’s liabilities, and if we refer back to our previous formula of

Reserves = Assets – Liabilities

CPF is NOT part of the reserves.

Past Reserves vs Current Reserves: What is the difference?

If you are confused about which bulk of assets falls under Current reserves and which under the Past Reserves, the answer is actually not rocket science.

Current Reserves

The Current reserves are the amount of reserve built from ground zero each time a new government is elected.

Past Reserves

The Past reserves consist of everything that was saved and accumulated before the current reserve.

Usage of Past Reserves vs Current Reserves

Types of ReservesUsageExamplesAfter that?
Past ReservesUsed to fund land-related projectsLand reclamation

Creation of underground space

Selective En-bloc Redevelopment Scheme (SERS)
These fundings convert financial assets to physical assets.

If physical assets were sold, money goes back to Past reserves. There will be no draw down.
Current ReservesTo fund some of the policies and initiatives you hear during budget.Part of the Unity Budget announced in February 2020-
Special Occasion
Source: giphy

Special Occasion

It is only on special occasions where a drawdown on Past Reserves can take place.

  • First, a drawdown on Past Reserves happens in the occasion when the Government or a Fifth Schedule entity spends more than the reserves they accumulated during the current term of Government (Current Reserves)
  • A drawdown on Past Reserves occurs when a physical asset funded is sold below its fair market value.

A Quick Timeline on the History of Singapore Reserves

To fully understand the Singapore reserves, there are a few key events to take note of.

DateWhat Happened?
August 1984Then Prime Minister, Lee Kuan Yew suggests giving the president of Singapore more power, to help safeguard the country's reserves.
Year 1990Then First Deputy Prime Minister Goh Chok Tong proposed the bill to create an elected presidency scheme that also comes with the power to safeguard the national reserves and the integrity of public service.
3 January 1991The bill was passed.
30 November 1991The bill took effect.

The "two-key" system of protecting past reserves is formed.
Year 1999Former President Ong Teng Cheong worked with the government to develop the white paper, The Principles for Determining and Safeguarding the Accumulated Reserves of the Government and the Fifth Schedule Statutory Boards and Government Companies.
13 May 1999It was approved by the Cabinet
2 July 1999It was tabled in Parliament
Year 2008 Global financial meltdown
January 2009The first time Singapore dipped into past reserves.

The government sought the President’s approval to use $4.9 billion from past reserves to fund two one-off measures to boost the economy.

Then President S. R. Nathan approved the request.
Year 2011The Government puts the money back into the reserves
Year 2020COVID-19 outbreak contracts Singapore's economy.

The impact is said to be way worse than the 2008 Global financial crisis.
March and April 2020The government requested to tap on past reserves to provide assistance package to deal with COVID-19.

President Halimah Yacob approved the draw.
  • The “two-key system” represents that the government and the president each holding one key. The government would be able to tap on past reserves only if with the approval of the president.
  • The objective of the white paper, The Principles for Determining and Safeguarding the Accumulated Reserves of the Government and the Fifth Schedule Statutory Boards and Government Companies, is to put in place a guideline and prevent any significant drawdown of the past reserves without the president’s consent.

Is There a Need for Singapore to Have So Much Reserves?

The actual amount of reserves we have was never revealed to the public, but here are some numbers.

As of 31 March 2018,

  • S$401 Billion: The Official Foreign Reserves managed by MAS
  • S$313 Billion: Size of Temasek’s portfolio
  • US$100 Billion: Assets managed by GIC

It is in the interest of Singapore to not publish the full size of reserves, simply because it can result in an attack on the Singapore dollar. With no natural resources or other assets, our reserves act as part of our defence in times of crisis.



About Ming Feng
A stint in Bloomberg gifted me with a beer belly, which only grew larger when I moved on to become a Professional Trader. Now I turn caffeine into digestible finance-related content.
You can contribute your thoughts like Ming Feng here.

Still have more questions after reading the article? Fret not, ask our community here!

Stay updated with the latest finance tips!
Receive bite-sized finance on Telegram here.

What's Popular

    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles

What's Popular

    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles

Still have more questions after reading the article? Fret not, ask our community here!