Time to start thinking about debt repayment, restructuring

EVEN as Singapore prepares to open the economy further under a Phase 3 plan, things are not going to return to levels seen before the Covid-19 pandemic. It will take time.

Like many countries, Singapore has implemented various support packages to help households and businesses survive this rough patch. These include the allocation of S$100 billion in relief measures to cushion the blow for businesses and help save jobs; enactment of new insolvency and restructuring laws, where distressed businesses are temporarily protected from legal proceedings by third parties, giving them the opportunity to recover financially; and a moratorium on loans. Despite this, most corporates are likely to continue to feel the strain from the pandemic, and failure to plan for unsustainable corporate debt could threaten not only the companies, but also derail a broader economic recovery.

Singapore's central bank chief Ravi Menon has said that as much as 20 per cent of the city-state's economy faces "deep scarring" from the pandemic, with aviation and tourism still battered due to limited travel. With the global aviation industry seen unlikely to recover to pre-Covid levels until the second half of 2022 at the earliest, there will be implications for Singapore as an aviation hub. This, in turn, will have an impact on national carrier Singapore Airlines.