SINGAPORE (Oct 1): Payment performance remained lacklustre in 3Q19 as prompt payments continued on a downtrend, according to a new report released Tuesday by the Singapore Commercial Credit Bureau (SCCB).

Prompt payments accounted for less than half of total payment transactions in 3Q19, retreating 0.63 percentage points to 48.81% during the quarter, compared to 49.44% in 2Q19.

However, on a year-on-year basis, the percentage of prompt payments was 0.5 percentage points higher than the 48.31% recorded in the same period last year.

Meanwhile, slow payments accounted for more than one-third of total payment transactions in 3Q19.

Slow payments inched up by 0.19 percentage points from 37.10% in 2Q19 to 37.29% in 3Q19. This is a 1.65 percentage point decline from the 38.94% for 3Q18.

Prompt payments refers to when 90% or more of total bills are paid within the agreed payment terms, while slow payment refers to when less than 50% of total bills are paid within the agreed terms.

In an analysis across five sectors – manufacturing, construction, retail, services and wholesale trade – SCCB notes that the manufacturing sector saw the largest increase in slow payments during the quarter, rising 1.14 percentage points q-o-q and 1.40 percentage points y-o-y.

It adds that the substantial increase was caused by payment delays of manufacturers of leather products, printing and publishing, and food products.

In 3Q19, some 39.22% of total payment transactions in the manufacturing sector were slow.

The construction sector continued to suffer from the highest percentage of slow payments, despite edging down 0.38 percentage points y-o-y to 46.90% in 3Q19.

Meanwhile, the retail sector performed the best, with a 9.64 percentage point y-o-y drop in slow payments following less delays by retailers of general merchandise, automobiles, and food and beverages, SCCB says.

In 3Q19, some 34.47% of total payment transactions in the retail sector were slow.

The remaining two sectors – services and wholesale trade – saw q-on-q increases in slow payments of 0.65 and 0.61 percentage points, respectively.

SCCB says the services sector was dragged by payment delays within consumer services, legal and social services, while that of the wholesale sector came from delays by manufacturers of durable and non-durable goods.

Separately, the bureau also noted that partial payments – a phenomenon occurring when between 50 and 90% of total bills are paid within the agreed payment terms – rose by 0.46 percentage points q-on-q to 13.91% in 3Q19.

The figures in the report were compiled by management consultancy firm D&B Singapore, which monitored more than 1.6 million payment transactions of firms operating through. The payment data is contributed to the SCCB by local firms.

Speaking on the increase in slow payments, Audrey Chia, chief executive officer at D&B Singapore, notes that in spite of the quarterly drops in slow payments for most sectors, their y-o-y performances had improved.

Indeed, y-on-y, the construction, retail and services sectors showed declines in slow payments by 0.38, 9.64 and 0.28 percentage points y-o-y, respectively.

Manufacturing and wholesale – experiencing a drag from the slowing global economy and a resultant drop in Singapore’s exports – were the only sectors that recorded increases of 1.40 and 0.54 percentage points, respectively.

Even so, Chia says that the overall improvement in slow payments is a good sign.

“We are seeing greater prudence in the extension of credit terms by companies here”, she says.