Introduction to Singapore Government Securities (SGS)

Singapore Government Securities (SGS) were initially issued to meet banks' needs for a risk-free asset in their liquid asset  portfolios. In 1998, MAS spearheaded efforts to enhance the efficiency and liquidity of the SGS market as part of its strategy to develop Singapore as an international debt hub. This was further refined in May 2000 with the introduction of a focused issuance programme aimed at building large and liquid benchmark bonds, primarily through larger issuance of new SGS bonds and re-openings of existing issues to enlarge the free float and occasional bond purchase programmes to re-channel liquidity from off-the-run issues to benchmark bonds. Since then, the SGS market has grown significantly, making it one of the fastest developing bond markets in Asia.

Unlike many other countries, the Singapore Government does not need to finance its expenditures through the issuance of government bonds as it operates a balanced budget policy and often enjoys budget surpluses. This allows the government to focus on the development of Singapore’s capital markets instead, and the issuance of SGS bonds and T-bills serves primarily to: 

i. build a liquid SGS market to provide a robust government yield curve for the pricing of private debt securities; 

ii. foster the growth of an active secondary market, both for cash transactions and derivatives, to enable efficient risk management; and 

iii. encourage issuers and investors, both domestic and international, to participate in the Singapore bond market.

Singapore Savings Bonds are non-marketable SGS issued to individuals to provide them with a long-term savings instrument.

As the fiscal agent of the Singapore Government, MAS is empowered by the Development Loan Act and the Government Securities Act to undertake the issue and management of securities on behalf of the Government.

The amount of SGS issued is authorised by a resolution of Parliament and with the President's concurrence. Each year, MAS seeks approval from the Minister for Finance for the total SGS issuance amount for the new financial year. MAS decides, in consultation with the SGS primary dealers, the timing and amount of individual bond issues.