FERDINAND MARCOS - MGA NAGAWA NI APO LAKAY

Sa kanyang pamumuno, maraming bagay ang nagawa ni Ferdie Marcos. Kabilang dito ang magic rice, rural electrification, ang unang light rail transit train, pinalawak na network ng irigasyon, nagdagdag ng daan-daang Marcos schools, 100,000 kilometro ng mga kalsada, maraming magagandang tulay, maraming livelihood program, hydro at thermal power plants, community-based healthcare, etc.

OF HEADLESS BEINGS AND GHOSTS OF NATIONAL SERVICE PAST

Goh Meng Seng's recent Facebook post on some ghostly tales prompts me to pen this article for posterity. When I was very young, my mother told me that if a person's 'lee hoon' is high, he or she tends to see manifestation of the paranormal. A good fortune teller once proclaimed my 'lee hoon' is very low, so thank goodness for that as I do confess a fear for things that go bump in the night. Somehow, I kind of assumed the Hokkien 'lee hoon' equates to psychic energy, possibly 精神能量 in Chinese. 

In my primary school days we lived in a village in Sterling Road vicinity, somewhere close to the Alexandra Fire Station. It was then called 'Bo Buay Kang' which I think translates to 'River of no source'. About a hundred metres away from our wooden house, the land sloped into a shallow valley where a well was located. It was an old well that had been covered up after WWII. My father alone, with us kids assisting in minor ways, dug out and brought it back to life again. Those who have never experienced a bath at a well will never understand how fresh and invigorating the cool water can be. The older villagers told tales of hauntings of a headless man in white singlets somewhere in the vicinity of the well. He was assumed to be a victim of a Japanese officer's sword. We took it as just tall tales to scare kids. Until one day, we had a new tenant. A young couple with 5 kids came. The parents were away at work during weekdays, returning only weekends. My mom sort of cared for the young kids. One dark night, one of the younger kids woke up and out of curiosity, peered through a crack in the wooden-panelled wall. Somewhere near the location of the well he saw the apparition that freaked him out. He woke his siblings. Next morning they described the headless man. Their youthful innocence and the fact the kids had no prior knowledge, met with no challenge to veracity. The very weekend when their parents came, the family packed up and left. In those days, there was no tenancy contract, no deposits. Just pack and go.

My eldest sister-in-law has high 'lee hoon' and she talked of her experiences on her honeymoon in Malacca when she could hear things at night in those old creepy hotels in Chinatown while my brother snored. I pooh-poohed this away at the time until one night decades ago, when she stayed-over. In the wee hours she woke up to attend to call of nature. In the semi-darkness in the hall she saw an old lady sitting on the sofa. She was not spooked, having had many such experiences. She remained calm and let the being be. Not wanting to frighten any of us, she kept it to herself until months later. When she described what she saw, it was apparent the apparition was my grandma whom sister-in-law had never seen in the very few photos we had. Surprisingly I was not frightened when I used to stay up alone for late TV shows, knowing it was my grandma.

Telok Paku was once a high paranormal activity area, it being the execution ground where the Japanese army chopped a lot of heads off when they occupied Shōnantō, that's what they called Singapore then. Part of the Changi airport runway now runs over the area. David Marshall, our first Chief Minister, once lived there. During my pre-U days, we classmates stayed over a weekend at one of those old holiday bungalow houses at Telok Paku. High spirited youngsters that we were then, we stayed out chatting the night away at Changi Village. We returned to the bungalow late at night. As we were walking along the dark lane, one of the classmates seemed to be suddenly possessed by something. Some of the guys felt a chill passing through. I felt nothing. The stone cold poor chap was assisted back to the bangalow. He was badly shaken, could not speak, eyes wide in shock. Needless to say, we broke camp the next day. 

When I was a recruit in the 70's, I participated in an island-wide riot exercise involving the Army and the Police. Our group took the role of demonstrators. We would go 'rioting' only to be attacked by the police and SAF. Our base was at the old Maju Camp, off Clementi Road. There we would spend our nights. On the first night I realised the toilet and shower building was thick with the stench of urine. It was nauseating even 20 metres away. The poor maintenance was abhorrent. I soon found out from the camp regulars that the placed was used as a mortuary during Confrontasi days. British casaulties from the jungles of Indonesia were helicopter-lifted to Singapore. The wounded went to Alexander Hospital, the dead to Maju Camp. The bathroom was where the dead bodies were washed. Hauntings were frequent and cries could be heard at nights. No NSmen, however macho, will use the toilets there at night. So everyone relieved themselves at the drains outside, thus the strong stench. I heard nothing and saw nothing during my 5 nights there. But I smelled a lot.

I was in SAFTI to attend two courses - section leader, and later officer cadet. Just outside SAFTI camp main gate, along Pasir Laba Road, was Peng Kang Hill. It was a torture place of sorts. Trainees often had punishments meted out with runs up and down the hill. What was memorable was the guard duties at the hill. I think there was a small ammo dump there, it being the reason for the guards. There were tales of haunting, especially at one of the guard towers (I think tower #3). It was not unusual for guards assigned to the haunted tower to request 2 details to man the place concurrently so they had a companion. Sorry to disappoint readers, nothing happened during my watch. But I can vouch it was unnerving to be alone in the tower in a dark night, with nothing but the forest all around.

'Boat Shed' was situated right at the end of Pasir Laba Road, an isolated and lonely place. it was what the name suggests, a shed where some aluminium flat-based landing crafts were kept. Just like Peng Kang hill, it used to be one of the locations SAFTI trainees were detailed as guards.  Hauntings were also reported there. It got a bit more unnerving after an accident nearby when a three-tonner transporter overturned and rolled down a hill slope. About 20 trainees perished. That accident happened during my time at SAFTI.  The vehicle commander, Capt Mokthar, was cashiered for the accident.   Back then, our lives were cheap. 20 NSmen killed and no public outcry, compared to the death of Aloysius Pang in 2017. I remember night guard duties at boat shed. When the darkness rolled in, the only thing to look forward to was the ration truck coming at about 10 pm with the night snack. After that, it was desolation, finding a corner to hide, and hoping the duty officer doesn't come to turn out the guards. There were stories of hauntings, but I never saw anything, not that I want to.

Yet another guard incident. Darn it, I'm wondering why is that so. This time I was guard commander at a very secluded and secretive place somewhere in Pasir Panjang area. This was a huge ammo dump we inherited from the British Army. I'm sure few Singaporeans ever set sight on this and not sure if it is still around. It was rolling moulds, not exactly hills, but low conical-rounded mounts, all covered in greenery to camouflage from air surveillance. The storage facilities were all underground. Again, this was a haunting place. It had an ancient feel about it and eerie after the sun sets. My 2 i/c was a Lance Corporal who was a somewhat hyper rascal. He had no driving licence but could sort of drive. So he took the land rover out for a spin. Did I say it was a huge complex we were guarding. Somewhere out of sight of the guardhouse where I was located, the vehicle overturned. He told me he had felt a cold shudder just before he lost control. As there was no injury or damage to both driver and vehicle, we flipped the vehicle upright and made no report. As to the cold shudder, was it an excuse or a haunting, I had no idea.

After my time at SAFTI, there were 2 interesting hauntings in the hills where live firing exercises were conducted. The first was a young lieutenant who went missing. Guards who last saw him said he checked out and was seen turning right into the restricted training area. Next several days, large search parties were sent out to comb the hills. Soon bomohs, taoists monks, dogs, clairvoyants, etc descended on the scene. He was never found again. Many years later, remains suspected to be of the missing officer, were found in some bushes on one of the hills.

The second SAFTI incident involved yet another lieutenant who disappeared into the training area under similar circumstances. But he was lucky. Several days later, a search party found him on one of the hills, exhausted but barely alive. On the hospital bed, he told a strange tale of a Malay lady who led him into the hills. He simply followed as he had lost control of his own will. But no one at the Gate had seen any lady with him.  He said he was lying in the bushes when soldiers walked past him and puzzled why they never see him.  I think this incident belongs to the 'horny female ghost seeking husband' category.

In my time in the reservist, I once led a platoon of infantrymen who were boatmen-converts. Boatman was a vocation in full-time national service whose job was to operate landing crafts. They were head-quartered in Pulau Tekong and individually attached out to training units that require their services. These boatmen had reputation of independence and non-respecter of ranks of the units they were attached to. But they too were respectful of the paranormal activities that was common in Tekong. There used to be several villages with Chinese and Malay residents. In the past there were some sort of Indonesian type dayak villagers who practiced witchcraft. It was believed the paranomal activities were embeded on the island after decades of witch-craft practices. My boatmen told me of many personal encounters and hauntings seem to predominate on Wednesday nights. They never venture out of camp on Wednesday evenings. Many other national service men had tales of haunting over the years. A cousin of mine had a personal encounter in his room. He said he felt a presence, saw something, but ignored it and just pulled the blanket over his head .... and prayed silently I guess.

I once participated in a reservist exercise in Pulau Tekong. In a company formation movement, 2 of my men went missing after the exercise. I sent some men to retrace our tracks, but they reported no sign of the duo. The company commander was notified and my platoon was sent out to search for them. We back-tracked a couple of kilometres, yelling out their names now and then. As evening shadows grew longer, I became increasingly worried as the 2 SAFTI 'missing' incidents and the paranormal notoriety of the island weighed heavy in my mind. Fortunately, they were found sitting down at a clean spot, relaxing, cigarette in hand, silly grins on their faces and nonchalant to the troubles they had put the whole platoon to. There was no excuse. They were stragglers who made no effort to catch up with the main party. For the remaining days of the reservist camp, the duo had the extra duties of cleaning my weapon and bunk.

I had only one personal experience. This happened when I was a corporal in 4SIR at Bedok camp. Each night and weekends or holidays, an NCO remains on duty in each company in the camp. His base is in the office of the Company Sergeant Major, or encik as we called him. The duty NCO hunkers down for the night in the CSM office. There is no bed, so how he sleeps is up to his own design. Most do not sleep. That office in Delta Company where I was, had a reputation of hautings. Weekday duties were not much of a problem since the rest of the men were in the barracks upstairs. The week end duty was a solitary one. I was the duty NCO on one week end. I took my mattress and blanket down from the barrack. With no disrespect to the CSM I decided to sleep on his large desk. I cleared the desk and placed the mattress over it. About 11pm I decided to hunker down for the night. The need for sleep being stronger than fear of the unseen, I turned out the lights in the room. The distant light from the parade square provided some comfort.

Some time in the night I was awoken by a sound. I strained my ears, and then I heard it again, above the lazy humdrum of the swirling overhead fan. It was the sound of shuffling feet movement. The sound came intermittently, a-one, a-two and then stop. And holly shit, it was in the room! Try as I might to calm my nerves, my heart was racing. As the sound never seemed to go away, I decided against my nature to face whatever it may be. So I took mental note of where I was and where the light switch was. I would flick the blanket away, jump off the table, fly to the light switch, all within one second. I swear that was exactly how it happened. Let there be light. Then, an anti-climax! My immediate thought at that particular instant was the laughter of my fellow NCOs when I would narrate the incident on next Monday morning. There were a couple of crumpled papers on the cement floor. The downward draught of the overhead fan caused the paper to shuffle on the floor. I turned out the lights and said good night to the moon shining through the window.

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THE BROKEN WINDOWS OF SINGAPORE

The fallacy of broken windows was introduced by French economist Frédéric Bastiat in 1850. This is the economic idea of opportunity cost, which is something that is unseen. Bestiat illustrated with the parable of a cobler whose son broke a pane in the window at his shop. All the folks who came said well, it's just too bad, but if there were no broken windows, there would be no jobs for glaziers. The cobler was advised to just a get a glazier to fix a new window.

The broken window parable is called a fallacy because the inherent idea is destroying something creates wealth. The cobler is forced to engage a glazier to fix the damage. Thus the glazier has an income, which he then goes on to buy groceries for his family. The grocer has the money to bring his family to a nice diner. The restaurant owner can go attend a concert, and so on... creating a multiplier effect. So the broken window indeed creates wealth.

However, what is unseen, is the fact that had the window not been broken, the cobler would not have to pay for the glazier. He could have used that money to buy groceries for his family. The grocer has the money to bring his family to a nice diner. The restaurant owner can go attend a concert, and so on... creating a similar multiplier effect. This lost benefit is known as the opportunity cost.

If destruction has economic benefits, then carrying the cobler narrative to a logical conclusion, a glazier can get boys to break as many windows as possible and he will be flooded with jobs and create greater wealth. This fallacy is not a joke. It is pushed by politicians who unwisely see economic benefits in creating wars. US weapons production created wealth and jobs in America for the destructive wars they create in foreign lands. Imagine taking those resources away from weapons production into fixing their third world country standard rails, roads and bridges.

We see a lot of broken windows in Singapore. I am agreeable to structures being replaced where they are dilapidated, no longer serve their purpose, pose a danger to users, or where greater capacity becomes necessary, etc. But change for the sole purpose of a new facade or to be more modern, is questionable. The government has a programme of tearing down and rebuilding almost the entire community centres all over the island.

Perhaps the most current topic is that of the new national stadium. It is basically a grand ostentatious show piece, a trophy infrastructure. The project had the green light despite the fact it is well known almost all stadiums built for world cups and olympics became white elephants after the events. Our new stadium was not even built for an event! Even stadiums in football crazy Brazil became white elephants, what possibility is there for Singapore to be any better. Finally, economic reality catches up, and the government has to bail out the failed private operators. Why tear down the old, but absolutely functionable national stadium, where we all had fond memories, and replace with an architectural show piece. The truth is, the government works on a very old economic model of infrastructure multiplier. Pour S$2b into a new structure and viola GDP grew by S$2b plus the multiplier effect. If the S$2b were to be handed out to the poor where the propensity to consume is great, they will spend and GDP too will grow. Busineses improve and income tax collection will increase.

Another current issue is SER. A more or less similar situation are blocks of residential buildings around new MRT station developments that are torn down. An example is HDB blocks at Viking Road, behind the Redhill Station. All these were torn down and condos rose in their place. This is the idea of the government of creating more wealth because cheaper structures give way to more expensive ones. Its just a matter of valuation, nothing to do with wealth creation.

In the case of SER, the point to be all riled up is not so much the cost-benefits to the residents involved. The concern is the sanctity of contract. The government has proven it will throw legal doctrines down the garbage chute if it serves their purpose. I am sure the Lease Agreement has some exit clauses, which probably has to do with eviction and evacuation due to structural concerns. It will not have anything to do with wealth creation nor re-development. Acquisition for re-development would be dictated by a different legislation.

Gaze over the landscape and you will see many examples of broken windows in singapore

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IF YOU HAVE NOT SEEN VACCINE HORRORS, IT DOESN'T MEAN IT'S NOT HAPPENING

 I'm sorry. This blog has been taken down by the powers that be. It was a listing of annecdotes of vax-induced injuries and deaths that went unreported in mainstream media. Inconvenient truths that you are forebidden to see.

DOES THE GOVERNMENT HAVE SUFFICIENT ASSETS TO MEET ITS PURPOSE

Singapore has always shunned the dangers of the bottomless pit of unrestrained social spending. The ethos has been you want better services, you pay more. Safety nets are in place for the lowest percentiles, but it has always been viewed as subsistence level provisions. The government makes intricate plans years in advance. It sees the need to plan for an ageing population that requires increased health services, and so GST rate hike is inevitable. The creeping hikes in various fees are suspect, such as the ERP. The government, and elites with a couple of million $ to spare, wonder why the useless eaters are agitated. The commoners feel extracting more out of them, especially at a time of high inflation, is an uncaring leadership and question the need when there is so much in national reserves. It's always very frustrating for both sides when it comes to distribution.

Let's scrutinise the Government Assets & Liabilities Statement as at 31 Mar 2022 and see if the state coffers are indeed brimming..... or bare.

Government assets as at 31 Mar 2022 (S$ millions)
       

CASH		61,227
INVESTMENTS:
Government Stocks	421,712
Others - Quoted	566,999
Others - Unuoted	497,693
With Agents	24,044	+1,510,448
TOTAL ASSETS		1,571,675

 

 

 

 

 

Leong Mun Wai once said the total assets is a 'proxy' for the national reserves. I have blogged this is not so, and you can see the reason why.


HOW IS THE CONDITION OF THE STATE COFFER

Let's look at whether the total assets are actually sufficient for the government, based on actual numbers as at 31 Mar 2022 and some assumptions, necessitated by a blackout on information.

Assets that can't be spent:

A substantial part of the cash is transferred to GIC + Temasek to invest, and some invested by other agents. The government invests some of the funds themselves. Not all the assets are available for the government to spend. These are:

(1) Government debt in the form of securities (other than SGS {infras} under the SINGA - Significant Infras Govt Loan Act). this was S$980,583,063,000. Proceeds of these borrowings cannot be spent.
(2) Funds transferred to GIC+Temasek includes proceeds from land sales and budget surpluses. The government cannot spend these which form part of national reserves. Nobody knows how much this is accumulated over the years. For the purpose of this discussion, let's just use some pretty conservation estimates -- Land sales at S$100b and budget surpluses at S$50b.
(3) Fiduciary funds, ie money held by the government on behalf of third parties. Substantial part of this is from statutory boards which must deposit their excess funds with the government under a Centralised Liquidity Management programme. This was S$42,604,000,000.
(4) Endowment Funds where the principals cannot be spent. The money have been locked in investments. We do not know the principal sums, but for estimates, let's just take the balances in the fund statements. These are Edusave Endowment Fund - S$6,704,277,000; Lifelong Learning Endowment Fund - S$5,003,745,000; Eldercare Fund - S$3,695,416,000 and Community Care Endowment - S$2,431,988,000.

Read: A primer on government accounting to understand the intracies involved. You need to understand this to be able to analyse government financials.

Translation and revaluation losses:
The huge translation losses of the MAS generated much internet comments. Many (especially PAP supporters) argued it's a paper loss. When rates change, the situation will be reversed. I suppose the same can be argued for valuation. Translation and valuation is a time-based recognition of losses. To have a view on adequacy of funds, we look at the financial status on a realisation, instead of an ongoing, basis.

For quoted and unquoted equities, we have no idea what the value should be. Let's simply take the book values. However, there is S$422B in government stocks. These are Treasury Bills and Bonds of other governments. In the rising interest rates environment, these assets face tremendous losses. Let's estimate a conservative loss of just 2% = S$8B.

What's the net assets available :

From the total assets, we deduct money that cannot be spent and valuation losses to arrive at the net assets available to cover the balance in the Consolidated Funds (that is carried into the next fiscal year), and funds appropriated to be spent in various programmes, both committed and contingencies.

	S$(million)	S$(million)
Total Assets		1,571,675
Less: Debts	980,583
Land sales	100,000
Budget surpluses	50,000
Fiduciary accounts	42,604
Endowment funds	17,836
Valuation losses	8,000	-1,199,023
Net assets Available		372,562

 

 

 

 

 

 
Adequacy of net assets available :

We now apply the net assets available to funds which have been appropriated and committed in prior budgets.

	S$(million)	S$(million)
Net Assets available		372,562
Less Consol Fund c/f		-303,367
Less funds appropriated :
Development Fund	149,542
Contingencies Fund	140,000
Devt Contingencies Fd	2,000
Devt Investment Fund	12,122
Pension Fund	12,350
Saver Premium Fund	1,848
INVEST Fund	1,965
Elder Care Fund	3,695
CONNECT Fund	570
National Research Fund	2,083
GST Voucher Fund	9,129
Pioneer Gen Fund	6,162
Merdeka Gen Fund	5,717
Long Term Care Fund	4,929
Public Transport Fund	23,844	-375,955
DEFICIT		-306,760

 

 

 

 

 

 

 

Subject to the accuracy of some assumptions discussed above, it seems the government coffer comes up short of S$307B.

It is also clear the total assets have nothing to do with national reserves. Neither is it a proxy for, or estimation of, the quantum of national reserves.


THE SECURITIES FUND

The government issues various types of securities for various purposes the proceeds of which cannot be spent.  These are :
* SGS (Market Devt), Treasury Bills - For market-making activities and SGD yield curve discovery
* SSB (Spore Savings Bond) - For retail investors
* On-demand SGS (Market Devt) - For liquidity management in MAS repo facility activities.
* RMGS (non-marketable) - For transfer of MAS foreign reserves to government
* SSGS (non-marketable) - For the investment needs of CPF (national pension) and some non-govt Trust funds

The proceeds on issuance, redemption, advance deposits, revenue and expenses of the securities that cannot be spent are recorded in the Securities Fund. No money is appropriated from the Consolidated Fund to help meet cash outflows. And no money is transferred to Consolidated Fund for spending. There is however, a proviso. The Minister has the power to transfer funds in excess of its needs to the Consolidated Fund.

The Securities Fund Statement shows a balance of S$981B and the Statement on Govt Borrowing showed face value of the securities + advance deposits at S$873B. The difference of S$109B means the fund has massive liquidity to meet its operations of securities turnover (issuance and redemption) especially for market development securities whose volume is extremely high.

Of interest is SSGS. Outstanding 2022 was S$515B fully invested by CPF. SSGS continues to grow over the years as CPF contributions continue to climb despite a greying population. So the huge numbers of foreign CECA employees helped out. Nevertheless the deficit in the coffers of S$307B could well have partly motivated the many retrospective changes in CPF regulations for delayed withdrawals, which is why CPF continues to experience net cash inflows.


SGS (INFRASTRUCTURE) ISSUED UNDER SINGA

The Significant Infrastructure Government Loan Act came into force in 2021. This allows the government to borrow up to S$90B to finance major long term infrastructure projects over the next 15 years. As at 2022, total SGS securities issued and outstanding is S$2.6B. For 56 years since independence on 9 Aug 1965, Singapore has lived under a legislation of no government debt for fiscals. Has the 3rd gen leadership opened the floodgate to fiscal borrowing? SINGA is only for S$90B, but the cap can always be lifted when required.

Recently, the government has finalised the Green Bond Framework.  This is the guideline for the issuance of a new type of government security called Singapore Sovereign Green Bond to be issued under SINGA. This is debt to finance green infrastructure projects. By 2030, S$35B of green bonds will be issued.


CONCLUSION

It does appear these is insufficient assets in the government coffer. The question is exactly how much. The S$307B deficit is just my conservative guess.

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YOU NEED TO UNDERSTAND GOVERNMENT ACCOUNTING BEFORE YOU CAN ANALYSE THEIR FINANCIALS

This blog is primed for the many that I have come across who bemoan the difficulty of understanding public financial statements. Some of these are accountants. If professionals have difficulty understanding, the ordinary guys surely have no chance. As stakeholders, citizens should take a keen interest and pay attention to public spending. In a presidential system of government, such as US and Philippines, Congress has fiscal oversight. The Executive, ie the government, must present the budget to Congress, and Secretaries of each Department are grilled as to the nature of each spending head at Congressional hearings. In Singapore Parliament, budget time is a free speech event - the Minister of Finance is free to say whatever. Bean counting is a boring topic. The Minister is lucky to get a 10% eyes-wide open attendance in the hallowed chamber during his Budget Speech.

The unsung heroes are the guys that look after the biggest ledger in the land. It is a humongous job. The Accountant General's Dept is the steward of our public finances and they are doing a great job keeping up with technology and delivering timely reports. Theirs is not to question why, but to record where the money is coming from and going to. This blog is in a way a tribute to them. The feature image is taken from AGD website and if some observant readers feel it is AGD of another country, that is not intentional on my part.

The first point to grab is public accounting works on a cash basis. You won't find the traditional accrual items like Accounts Payable, Accounts Receiver, loans, advances etc. Of course separate records are maintained. Understanding the cashflows is key.

The second point is the AGD's ledgers include only all organs of the state and ministries. Statutory boards and corporations owned by them are excluded.

NOTE: The debits and credits are my way of explanation to provide a conceptual accounting overview. I have no details of exactly how the system works. It may well be no traditional 'T' accounts at all, just some forms and complex cost centre, revenue and expense codes.

Understanding the main Accounting heads:

The Statement of Assets and Liabilities (let's call it Balance Sheet for short) of the government is very simple.

ASSETS	LIABILITIES
Cash	Deposit Accounts
Investment	Main Fund :    Consolidated Fund
	Other Fund* : Development Fund
	Pension Fund
	Mederka Generation Fund
	GST Voucher Fund
	Edusave Endowment Fund
	Medical Endowment Fund
	Special Fund :Securities Fund

* There are 19 other funds in 2022. These 6 are just listed for illustration

There are just 2 main categories of assets -- Cash and Investments, and 2 main liabilities categories - Deposit Accounts and Funds Accounts.

Cash : Deposits with MAS is the main account. The government should have operating accounts with commercial banks (probably DBS). As deposits at commercial bank accounts build up, they are transferred to MAS account. When funds are required, commercial bank accounts are replenished by transfers from the MAS account.

The money coming into the government coffers can be grouped as :
(1) Operating revenue - taxes, excise duties, permits, licences, fees, fines, rental, etc
(2) Debt (spending) - SGS (infras) under SINGA (Significant Infrastructure Loan Act)
(3) Investment income (government's own portfolio -- nothing to do with GIC/Temasek)
(4) NIRC (Net Investment Return Contribution fro GIC, Temasek and MAS)
(5) Fiduciary money - money held in trust by government, such as deposits from statutory boards, money of bankruptcies, corporate liquidation, official assignees, GST output tax, etc.
(6) Debt (non-spending) - in the form of various government securities.

(1)-(4) are money that can be spent, (5)-(6) are not to be spent.

Receipts (1)-(5) go to Consolidated Fund, (6) goes to Securities Fund.

Entries on receipts:
Debit : Cash        Credit: Consolidated Fund (1-5)
Debit : Cash        Credit: Securities Fund (6)
On payments:
Debit : Relevant fund              Credit : Cash
Debit : Securities Fund            Credit : Cash
On investment of funds (to GIC/Temasek, invesment agent, or invested by government:
Debit : Investments         Credit : Cash

Investment : The government invests through GIC, Temasek, investment agencies, or by themselves. Some funds that are not meant to be spent are transferred to GIC/Temasek to invest. The government holds massive amount of cash meant to be disbursed by the various funds over a time plan. In the meantime, these are invested temporarily. The funds are parked in earning assets, mostly in government stocks. Returns from government investments are distributed to the relevant funds accordingly.

When the funds are invested or moved out to invest:
Debit : Investments        Credit: Cash

Deposit Accounts : These are various types of funds held in trust by the government. The bulk of these are cash belonging to Statutory Boards which are in access of their immediate needs. These are deposited with the government under a Centralised Liquidity Management programme. Deposit accounts are interest interest bearing deposits.

When funds are received for Stat Boards:
Debit : Cash        Credit: Deposit Accounts.
When funds are withdrawn:
Debit : Depoit Accounts        Credit : Cash.

Funds : Governments use fund accounting which is a system used to tracking the amount of cash assigned to different purposes and the usage of that cash. It's purpose is accountability, not profitability. A Fund Account is created for each specific purpose governed by a relevant legislation. Each fund accounts for its individual Income and Expenditure Statement. These statements are consolidated in a Government Income and Expenditure Statement. The 3 groupings of funds are my own arbitrary classification for the purpose of explanation here.

Main fund - Consolidated Fund : This fund has 3 main functions -
1. All receipts (which can be spent) are credited into this Consol Fund
2. All the funds appropriated to the various "Other Funds" are debited to the Consol Fund and credited to the relevant "Other Funds".
3. All money spent by the government (except securities) are debited to Consol Fund. Thus all operating expenses of the state organs are recorded in this fund. By the use of well-defined codes for all expense headings and cost centres, AGD can track each and every Ministry's expenditure in detail.
4. The consolidated government income and expenditure statement is extracted within this fund.

When money is received :
Debit : Cash          Credit: Consolidated Fund
When money is spent:
Debit : Consolidated Fund        Credit: Cash
When funds are appropriated to other funds:
Debit : Consolidated Fund        Credit: Relevant other funds

Other funds - Governments have all sorts of funds not related to the running of the state machinery. Some funds are one-off purpose, some long term and on-going purposes, such as development purposes. Fiduciary funds are common - to take care of pension funds, etc.

All these spending programmes have nothing to do with the day-to-day running of the government. They are reported under relevant funds for accountability purposes. Each of the funds will separately report how the money is spent each year and what is carried forward.

Unlike the budget which are spendings for each fiscal year, these funds have different timeline for disbursement depending on the specific programmes. It could be funded in one fiscal year and disbursed over several fiscal years. Development funds are of this nature.

Some funds are Endownment Funds, a few of them have endownments which have to be retained as principals. The funds are invested and only the earnings can be spent.

When money is allocated to these funds:
Debit : Consolidated Fund        Credit: Relevant other funds
When money is spent:
Debit : Relevant other funds        Credit: Cash

Special fund : Securities Fund
All receipts and payments regarding government securities are recorded in the Securities Fund. These are debts for which the proceeds cannot be spent. Thus the Securities Fund are segregated from Consol Fund. The cashflows do not course through the Consol Fund.

On receipt of funds:
Debit : Cash        Credit : Securities Fund
On payments :
Debit : Securities Fund        Credit : Cash

Note: The only securities not included in the Securities Fund are the SGS (Infras) issued under the SINGA (Significant Infrastructure Government Loan Act

The big picture of the government balance sheet :

The broad stroke picture I painted is simply this. The assets side represents all the money that the government has which consist of cash deposits at MAS (and possibly some commercial banks) and investments, some of which are with GIC, Temasek and other investment agents. The liabilities side represents (1) money which does not belong to the government (Deposit accounts), (2) programmes which the money has been committed (various other funds), (3) debt (Securities Fund) (4) Balance available for next fiscal year (Consolidated Fund).


In the follow-up blog I shall be discussing some of my observations of the Government Statement of Assets and Liabilities as at 31 Mar 2022. This blog is a prep to understanding the controversial points I shall be raising. That's coming up next.

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