Resilient economy versus uncertain outlook splits views on Singapore's monetary policy
This is what many analysts believe will happen on July 30 when the Monetary Authority of Singapore (MAS) releases its quarterly policy statement.
However, this is not a consensus view. Quite a few analysts believe that the uncertainty over growth and inflation outlook might prompt MAS to further ease its policy stance.
The MAS has already
eased its policy stance twice this year to slow the rate of S$Neer appreciation.
The MAS policy statements usually have implications for the value of the Singapore dollar against other currencies – which is important for Singaporeans planning to travel abroad or making hefty payments such as tuition fees for their children studying abroad.
Unlike other central banks, the MAS manages monetary policy by letting the local dollar rise or fall against a basket of currencies of Singapore's main trading partners within an undisclosed trading band, known as the Singapore dollar nominal effective exchange rate, or S$Neer.
MAS's primary tool for managing the S$Neer is intervention operations in the spot foreign exchange market, which involves the sale or purchase of US dollars against the Singapore dollar to ensure that the S$Neer is kept within the policy band, and is consistent with domestic price stability.
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Asia News Network
15 minutes ago
- Asia News Network
Indonesian manufacturers see tough times ahead as higher US tariffs kick in
August 4, 2025 JAKARTA – Indonesian manufacturers are increasingly cautious in their outlook as business confidence has fallen to a record low amid concerns over United States import tariffs. Experts warn that waning sentiment risks holding back investment. The latest manufacturing Purchasing Managers' Index (PMI) report from S&P Global shows that producers' expectations for business conditions in the coming year slumped sharply in July as confidence hit the lowest level since the series began in April 2012. Business confidence is an essential indicator to predict future behavior in the crucial sector, including decisions on investment, production expansion and employment policies, according to Permata Bank chief economist Josua Pardede. 'In the short to medium term, weak business confidence could result in slower new investments in the manufacturing sector, which could adversely impact production and job creation,' he told The Jakarta Post on Friday. While current manufacturing activity improved as the headline PMI index rose to 49.2 in July from a reading of 46.9 in June, firms raised concerns that the US tariffs and reduced purchasing power on the part of clients would limit production volumes in the year ahead. Also, with a value below the 50-point threshold that separates expansion from contraction, the index remained in negative territory for a fourth consecutive month amid sustained weak output and demand. 'July's survey data indicated another negative month for the health of the Indonesian manufacturing economy. Downturns in output and new orders were sustained at the start of the third quarter, but eased from June.' Usamah Bhatti, economist at S&P Global Market Intelligence, explained on Friday. 'At the same time however, there was a renewed fall in new export orders, while firms remained in retrenchment mode as indicated by falling employment and purchasing levels,' he added. Companies bought fewer materials in July, citing lower production requirements as they tried to use up existing stock. This extended the decline in purchasing activity for four consecutive months. The survey shows that firms also faced additional strain on supplies, with longer delivery times due to shipping delays and disruption caused by the Iran-Israel conflict that lasted 12 days from mid-June. Josua pointed out that, with employment and purchasing activity remaining in contraction territory, the manufacturing sector was likely to stay cautious about scaling up production capacity and hiring. The situation was exacerbated by the reported increasing price pressure weighing on profitability, as cost inflation hit a four-month high amid rising raw material prices. Exchange rate fluctuation also contributed to higher prices for imported goods. Josua argued that a recovery in the country's manufacturing sector in the short term would depend on the government stabilizing macroeconomic conditions by managing inflation, boosting spending power and mitigating risks from international trade. 'Without strategic measures and appropriate policy interventions, the weak business sentiment risks prolonging the manufacturing sector's contraction, hampering broader economic recovery,' Josua said. A research note from PT Samuel Sekuritas Indonesia published on Friday also highlights that reviving optimism among manufacturers would hinge on effectively managed external trade pressures and stabilized global commodity prices, as well as domestic fiscal and monetary policy support. 'Effective navigation of geopolitical tensions and global economic uncertainties will remain crucial for restoring stronger manufacturing growth in quarters ahead,' reads the note, adding that record-low manufacturer sentiment amid US tariffs could further dampen external competitiveness, potentially exacerbating Indonesia's already vulnerable trade position. The latest S&P Global survey was conducted between July 10 and 24, so most responses would have been submitted before the announcement of the trade agreement with the US. In the bilateral trade talks with the US, Indonesia has agreed to a range of regulatory changes to address what the US deems nontariff barriers. According to a joint statement on the trade framework published on July 22 on the White House website, Jakarta will eliminate tariffs on 99 percent of US goods, including agricultural products, seafood, pharmaceuticals, automotive items and information and communication technology (ICT) equipment. In return, Washington will reduce its 'reciprocal tariff' on Indonesian goods from the 32 percent threatened earlier to 19 percent, with a possibility of further cuts for select commodities 'not naturally available or domestically produced in the US'. Meanwhile, the Industry Ministry reported on Thursday that Indonesia's business confidence index (IKI) had increased to 52.89, up 1.05 points from 51.84 in June. It attributed the increase to upticks in new orders, inventories and production, though the latter remained in contraction territory, while growth in orders was due to increased demand from both foreign and domestic markets. 'However, a contraction in output shows that business players are still cautious about increasing production amid global uncertainties,' ministerial spokesperson Febri Hendri Antoni Arif said in a statement. The rise in the IKI indicated the country's manufacturing index remained in an expansion phase, he noted, which reflected the sector's resilience amid global uncertainties and the weakening economies of key trade partners like the US, Japan and China, as well as European countries. Bank Danamon economist Hosianna Evalita Situmorang also described the improvement as a sign of gradual recovery in the manufacturing sector amid uncertainties in trade policies and falling exports, signaling growing domestic demand that supported the real sector. However, she said the waning optimism among manufacturers reflected persistent challenges, particularly slow government spending in the first half of this year, which in turn hindered the impact of interest rate cuts from reaching the real sector. 'Looking ahead, hopefully [business confidence] will improve, given the accelerating government spending and improved liquidity,' she told the Post on Friday.
New Paper
2 hours ago
- New Paper
Decoupling to save on tax may just cost you the right to your property
Just google the word "decoupling" and you will see multiple listings from realtors and lawyers alike promoting their services to help property buyers avoid paying additional buyer's stamp duty (ABSD) with such a creative home ownership plan. But those who have been peddling such services for years may want to hit the pause button for now so that they can study the recent High Court case which found that such transactions are not without pitfalls. Indeed, the court found that owners who decouple can run afoul of the tax law if they are not upfront with their arrangements. This is especially so if property buyers are lured into thinking that decoupling is a watertight loophole that allows Singapore home owners to buy a second property without paying ABSD, while still retaining ownership in both properties. Joint owners who decouple - that is, one takes over the whole property - often have the endgame of letting the person who sold out buy a second property as a first-timer who does not have to pay the 20 per cent ABSD levied on Singaporeans. To further save on stamp duty, some couples plan ahead and buy their first property in a 99-to-1 share, so they need to pay the normal stamp duty on just that 1 per cent share if the 99 per cent co-owner takes over that tiny share. This scheme is not the same as that in the recent 99-to-1 saga that saw some families penalised for avoiding ABSD. Such cases involved first-time buyers who could not afford a home, so they roped in their relatives, who already own homes, to support mortgage applications. But instead of buying as joint owners, which would attract ABSD on the full price, the first-timers bought solely as 100 per cent owners and then "sold" just 1 per cent of the property to relatives. So the relatives paid ABSD on only that minute share. Owners caught using the two-stage sham have been ordered to pay the full ABSD and a 50 per cent surcharge. But decoupling has long been viewed as a legitimate move for longer-term planning because owners can hold and dispose of properties in whatever proportions they choose. The spotlight fell on such transactions recently because a couple who fought over their property stakes highlighted to the High Court that such deals were not as simple as they had made them out to be. Ironically, the case that sparked the court's probe into this popular tax-saving move did not even involve decoupling, as the then dating couple broke up before any prospect of another purchase. During the good times, they had planned to hold their first property in the ratio of 99 to 1, in favour of the girlfriend. A reason for doing so was to avoid paying ABSD if they were to purchase a second property. When they fell out, the true picture emerged, because the boyfriend claimed he paid more and so should own a lot more than his tiny share. In the end, he was awarded a share of over 50 per cent, only because the court took note that no taxes were avoided as the couple did not decouple or buy another property. The outcome might have been different had the boyfriend bought a second property after decoupling without paying ABSD and then staked a claim for a share in the first property. High Court Judge Lee Seiu Kin noted that while there was nothing inherently wrong with buyers holding their stakes in the 99-to-1 proportion, the transaction could turn illegal if the decoupling was not a genuine outright transfer but merely a scheme to avoid paying tax. For instance, if the 1 per cent owner gives up the share but has an arrangement with the other owner to still co-own that same property, this owner would be deemed to have evaded tax by wrongly declaring his true beneficial ownership. If he then buys another property as a "first-time buyer" and so saves 20 per cent of ABSD, he could be accused of duping the taxman because he is still a "beneficial" co-owner of the first property. If that is not risky enough, using the 1 per cent as a ploy to save on buyer's stamp duty in an anticipated decoupling move could also attract penalties for underpayment of tax. The Inland Revenue Authority of Singapore (Iras) noted that whether tax avoidance or tax evasion has been committed would depend on the facts and circumstances of each case. The test often boils down to whether the property transactions are carried out in good faith as a financial planning move or a deliberate attempt to avoid paying more tax, such as using a contrived scheme that has little or no commercial substance or withholding crucial information from the taxman. Penalties aside, the recent case provides a cautionary tale that those who commit an "illegal" act, such as using a scheme to deliberately avoid paying taxes, may find it hard to stake claim on any disputed property. Assume co-owner Jim "transfers" his share in the property to co-owner Jane to avoid paying more tax on his next purchase. Jim is likely to face an uphill task to claim that he still owns a share in the property fully owned by Jane because the courts are unlikely to uphold a sham deal. So before owners think about saving on taxes, they should ask whether they are prepared to give up the decoupled real estate should they end up in a dispute or divorce later. Still prudent to go 99 to 1? The stark manner in which one owner holds 99 per cent while the other has 1 per cent is a dead giveaway to the taxman that this could be a scheme to pay less tax. After all, the couple in the High Court case admitted that they held their property in this way because they had planned to decouple later. But this was done solely to pay less tax because the 1 per cent owner actually viewed himself as an equal owner and had contributed substantially to the property purchase. Based on Justice Lee's analysis, such decoupling cases would minimally attract the penalty for underpayment of stamp duty unless the owner can convince the taxman that he genuinely held only 1 per cent of the property. However, the 1 per cent owner who makes such a declaration and then transfers away the share is as good as forgoing the rights to the decoupled property. After all, claiming otherwise would amount to an admission of giving false information to Iras, which is a serious offence. No wrongdoing for genuine gifts and sales National University of Singapore tax expert Stephen Phua said he knew of owners who were holding unequal shares in their properties long before the ABSD scheme started in 2011 to curb speculation. "Some may just hold 1 per cent because they genuinely only wanted to help pay down the mortgage," said Associate Professor Phua, who also practises as a tax consultant with Allen & Gledhill. So, if such owners subsequently transfer their 1 per cent share in the property before buying another one, it would be difficult to accuse them of wrongdoing since the arrangement was a genuine gift. Similarly, existing joint owners who decouple cannot be said to be under-declaring their shares if the transfer was genuine and stamp duty was properly paid on 50 per cent of the market value. If the spouse who no longer owns any residential property buys another property, no ABSD is payable, Prof Phua added. This means that if you decouple, you no longer own that property. If that is not your intention, you should do your sums to see if it's worth losing your stake in this property just because you want to save on ABSD for the next purchase.
Business Times
12 hours ago
- Business Times
Over 900 private homes sold at 3 new launches; River Green leads with 88% sold at S$3,130 psf on average
[SINGAPORE] Homebuyers took up more than 900 new condominium units over the weekend, with River Green chalking up the strongest sales rate of 88 per cent at an average price of S$3,130 per square foot (psf). Nearby, Promenade Peak recorded a 54 per cent take-up rate with prices going up to S$3,521 psf, while the suburban Canberra Crescent Residences moved 40 per cent of its units at an average price of S$1,974 psf. Taken together, the three new projects sold more than 62 per cent of their combined inventory of 1,496 units, noted PropNex chief executive Kelvin Fong. Including the 893 new units sold in July, the new home sales tally (excluding executive condominiums, or ECs) for the third quarter of 2025 so far stands at over 1,820 units – well over the 1,212 sold in the whole of Q2, Fong said. This reflects continued strength in private housing demand and homebuyers' confidence in the mid- to long-term outlook of Singapore's residential property market, he said. Huttons Asia chief executive officer Mark Yip highlighted that the strong turnout at the 524-unit River Green and 596-unit Promenade Peak, in particular, indicates robust appetite for prime homes. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'To collectively sell more than 700 units on launch weekend is an impressive result,' said Yip. 'This speaks volumes of the demand in the market and their acceptance of these two projects.' The strong weekend performance also pushes new home sales in the Core Central Region (CCR) to their highest level in over 16 quarters, said Fong. ERA Singapore chief executive officer Marcus Chu said: 'This indicates that despite economic headwinds, demand for CCR homes remains strong, supported by resilient local interest.' It also signals a broader recovery in the CCR market, following tepid sales since additional buyer's stamp duty rates were hiked in April 2023, noted Fong. 'Many buyers are seeing the strong value proposition of CCR projects in view of the narrowing price gap between CCR new launches and that of the Rest of Central Region, of late.' The strong showing follows firm bidding activity in recent state land tenders in other prime locations. Just last week, a Holland Link site drew five bids with a top offer of S$368.4 million or S$1,432 psf. In June, a Dunearn Road site attracted nine bids , with a high of S$491.5 million or S$1,410 psf. River Green: Blockbuster sales Of the three new projects launched, River Green in District 9 led the pack with 460 units, or 88 per cent, of its 524 units sold as at Sunday (Aug 3). Prices averaged at S$3,130 psf, said Wing Tai in a statement. Around 98 per cent of buyers were Singaporeans and permanent residents, the developer added. This marks the best-selling CCR project in recent memory, said Singapore Realtors Inc (SRI) head of research and data analytics Mohan Sandrasegeran. Its performance surpasses that of Upperhouse at Orchard Boulevard, which moved 54 per cent of its 301 units when it launched two weeks earlier. The Robertson Opus, another development in the River Valley area, sold 41 per cent of its 348 units that same weekend. Prices of Upperhouse and The Robertson Opus averaged at S$3,350 psf and S$3,360 psf, respectively, then. Yip from Huttons believes that River Green's compact unit sizes made them more affordable and appealing to buyers. Fong noted that one-bedders transacted from S$1.16 million to S$1.5 million, two-bedders from S$1.46 million to S$2.4 million, three-bedders from S$2.19 million to just under S$3 million, and four-bedders from S$2.7 million to S$3.5 million. 'Buyers saw this as a perfect opportunity to own a home in the CCR,' said Yip. Likewise, chief research officer Nicholas Mak observed that the average unit size at the 99-year leasehold development was 668 sq ft – significantly smaller than the estimated 921 sq ft per unit in its government tender. 'By shrinking the size of each condominium unit and making these properties affordable to the middle-class locals, it can be argued that some developers are democratising the high-end housing market in Singapore or at least creating an illusion of doing so,' said Mak. Promenade Peak: Firm interest At the city fringe, the 99-year leasehold Promenade Peak sold 320 units, or 54 per cent of its 596 units, said developer Allgreen in a statement on Sunday. One- to three-bedroom units under its Promenade Collection were sold at an average of S$2,894 psf, while three- to five-bedroom units under its Promenade Suites averaged at S$3,343 psf. The highest price transacted as at Sunday was S$3,521 psf, underscoring buyers' confidence in the project's offerings and city-fringe location, said Allgreen. Singaporeans made up the bulk of buyers, at 90 per cent, followed by permanent residents accounting for 9 per cent of buyers, and foreigners at 1 per cent. PropNex's Fong added that around 82 per cent of units sold were two- and three-bedders, and nearly half of its four-bedders were taken up. 'The strong demand for larger units suggests that many of the buyers could be end-users purchasing the properties for own-stay,' he said. SRI's Sandrasegeran reckoned that the simultaneous launch of River Green and Promenade Peak may have created a sense of urgency among buyers. The two likely gained momentum from earlier nearby launches as well, which appear to have generated spillover interest as buyers explored options in the area, ultimately boosting overall demand, he said. He added that the success of these launches could set the tone for upcoming developments in the area, including Zyon Grand later this year and River Valley Green (Parcel B) next year. Canberra Crescent Residences: Steady sales In the north, Kheng Leong and Low Keng Huat's Canberra Crescent Residences sold about 150 units, or 40 per cent of its 376 units, as at Sunday. Prices averaged at S$1,974 psf, market sources said. The project marks the first condo launch in the north since Norwood Grand in November 2024, and is the first in Canberra in four years, said Yip. Fong noted that some 80 per cent of units transacted were two- and three-bedders; all three one-bedders and nearly a third of its four-bedders were also sold. Prices started at S$880,000 for a one-bedroom unit and went up to around S$2.6 million for the four-bedroom units, he added. ERA's Chu said: 'This pricing anomaly (of being close to EC land rates) results from the developer's strategic land purchase during a market slowdown in 2024, combined with a 'priced-to-sell' approach, enabling buyers to benefit from built-in value and potential future appreciation.'
