Drop in companies' long-term debts: DP Information Group
POSTED: 17 Apr 2013 12:33 AM
A study by DP Information Group has showed that Singapore companies are starting to pay up on their long-term debts.
SINGAPORE : A study by DP Information Group has showed that Singapore companies are starting to pay up on their long-term debts.
According to the Q1 2013 Trade Payment Data released on Tuesday by the DP SME Commercial Credit Bureau, severely delinquent debts have nearly halved, dropping to just 15 per cent.
DP Information said these refer to debts which are unpaid for more than 90 days and they have been growing steadily since 2011 to reach a peak of 29 per cent during the third quarter of 2012.
It added that there are several factors that may have contributed to the drop in long-term debts.
Ong Siew Kim, senior general manager of DP Information Group, said: "Companies tend to be better payers towards the end of the financial year. We regularly see improvements in the fourth quarter as companies settle debts and square off their books.
"We have also seen an increase in companies being more active in pursuing debts, either through professional receivables companies or by having their accounts staff chase outstanding amounts."
Ms Ong added that it is also possible that a portion of the debt has been written off when companies accept that the debt has gone bad.
While the payment of long-standing debts has improved, the rate of payment of all debts has remained the same as last quarter, at 38 days.
DP Information said the construction, communications/logistics, healthcare/medical and services sectors have enjoyed speedier payments during the first quarter of the year.
However, credit companies and those in the shipping/marine and utilities/fuels sectors have seen the rate they get paid slow down.
The findings are based on payments made by more than 120,000 corporations and small and medium enterprises in Singapore each quarter.
- CNA/ms
- wong chee tat :)
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