SINGAPORE: Companies are paying more bills on time, according to the Commercial Credit Bureau.
The bureau said the number of prompt commercial payments rose to 51.59 per cent in the fourth quarter of last year. That is up by a moderate 2.29 percentage points from 49.3 per cent in the previous quarter.
Prompt payment means a company has paid at least 90 per cent of its total bills within agreed upon payment terms.
It was the first time in two years that 50 per cent of prompt commercial payment transactions were recorded. This comes on the heels of a slight economic uptick in the fourth quarter last year. The Ministry of Trade and Industry estimates the economy grew by 1.1 per cent year-on-year in Q4 2012.
Year-on-year payment promptness also increased 12.09 per cent per cent from 39.5 per cent last year. Payment promptness was at its peak in Q3 2012 when it made up 61.2 per cent of all commercial transactions in Singapore.
But the number of slow payments (when a company pays less than 50 per cent of its bills on time) increased slightly last quarter, up 0.79 percentage points to 40.99 per cent.
The construction industry saw the biggest drop in defaults. Slow payments fell 8.24 percentage points to 41.19 per cent quarter-on-quarter. A year-on-year comparison shows a decline of 17.11 percentage points in payment defaults.
With heavy government investments in industrial projects and a strong pipeline of nationwide rail transit and road infrastructure projects, the downward trend in slow payments is likely to continue into the next quarter.
The retail industry - traditionally the worst paymaster - also saw defaults fall on the back of strong seasonal sales in December.
The retail sector registered 54.73 per cent slow payments, a decrease of 4.98 percentage points from Q3 2012.
The wholesale sector registered the lowest proportion of slow payments at 35.7 per cent a 4.68 percentage point increase from the previous quarter.
- CNA/fa
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