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SINGAPORE (Feb 18): Singapore will reduce the number of foreign workers working in the country’s construction, marine shipyard and process sectors this year, according to Deputy Prime Minister and Finance Minister Heng Swee Keat.

In particular, the S-Pass dependency ratio ceiling (DRC) for these sectors will be reduced to 15% from 20% currently -- in two phases.

“For many years, foreign workers have been part of our workforce,” Heng says in his Singapore Budget 2020 speech in Parliament today.

“With our declining local labour force growth, foreign workers are a necessary complement, but we must calibrate the inflow carefully, in a way that creates opportunities for Singaporeans.”

He adds that the foreign worker levy rates for all sectors will be maintained this year. 

Following Heng's speech, the Singapore Business Federation (SBF) notes that the tighter restriction on foreign workers may come as "unwelcome" news to many local enterprises.

But it says that this is aligned with the government's efforts in the past years to manage manpower growth and encourage local enterprises to restructure and reskill local workers.

Ajay Kumar Sanageria, deputy head of tax at KPMG Singapore, agrees saying the move shows that the government is not looking at the "easy route" to meet manpower needs.

"This is to make sure that we do not lose sight of the medium to long term challenges and ensuring that our productivity targets are not compromised," he says.

"While it is not going to be easy for these sectors, it is even more imperative for them to continue to transform and adopt technologies by tapping on the enhanced schemes announced in the budget," he adds.