How are Past Reserves protected?
The President safeguards Singapore’s Past Reserves through veto powers, access to full financial data, and oversight of key appointments, ensuring accountability under the constitutional “Two-Key” system.
Last updated 23 October 2025
What are the safeguards in place to ensure accountability in the management of the reserves?
Under the current “Two-Key” system, the President and the Council of Presidential Advisers have full access to information on the reserves, and they play a critical role in safeguarding Past Reserves.
Statements on the government’s reserves position are submitted directly by the Accountant-General’s Department (AGD) to the President, and audited by the Auditor-General’s Office (AGO). Under the Constitution, the Accountant-General and Auditor-General have the duty to inform the President of any proposed transaction by the Government that is likely to draw on Past Reserves.
What is the President’s second key?
Under the Constitution, the President safeguards the Past Reserves of the Government and Fifth Schedule entities in the following ways:
Approval of the Annual Budget of the Government and Fifth Schedule Entities
The President can exercise veto powers over proposed transactions that draw on Past Reserves. During the annual Budget process, the President may also veto the budgets of the Government and Fifth Schedule entities if he is of the opinion that their budgets are likely to draw on Past Reserves. In such a case, the President’s assent to each financial year’s Budget is an important safeguard and check against a profligate Government spending more than the reserves it has accumulated in the current term.
Approval of appointment and removal of key Government officials and board members of the Fifth Schedule Entities
The President has veto power over the appointment and removal of: (i) Board members or directors of the Fifth Schedule entities; and (ii) appointments of key public officers such as the Accountant-General, Auditor-General, and Chief Valuer.
Rules governing how investment returns from Past Reserves can be taken into each year’s Budget for spending:
Net Investment Returns (NIR): The Constitution allows up to 50% of the expected long-term real rate of return (ELTRROR) on relevant assets (i.e., net assets invested by GIC, MAS, and Temasek, minus Government liabilities) to be spent in the annual Budget. The ELTRROR has to be concurred with by the President each year. In the event that the Government and President do not agree to the ELTRROR, the 20-year historical average rate of return will be used to determine the NIR to be taken into the Budget in that year. The Minister for Finance has to certify to the President the amount of NIR to be taken into the Budget for spending each year.
Net Investment Income (NII): The Constitution allows for up to 50% of the Net Investment Income (NII) derived from past reserves from the remaining assets to be spent in the annual Budget. The Minister for Finance has to certify to the President the amount of NII to be protected as part of Past Reserves each year.
Read more on the NIR and NII.
President’s access to information
The President is entitled to all information that the Cabinet and the boards of the Fifth Schedule entities are entitled to.
The President is entitled to ask Ministers, Permanent Secretaries and senior public officers and any of the board members, directors or CEOs of the Fifth Schedule entities for such information. When asked, all these persons are duty bound to supply the information requested.
The President has full information about the size of the reserves (including a listing of physical assets like land) and the performance of the investment entities. Each year, the Accountant-General prepares and submits the Government’s financial statements to the President. These statements are independently audited by the Auditor-General.
Key approvals by the President to draw on Past Reserves
In October 2008, then-President S R Nathan gave his approval for a S$150 billion guarantee on all bank deposits in Singapore to be backed by Past Reserves. This was against the backdrop of the Global Financial Crisis where other jurisdictions were guaranteeing bank deposits as well. If Singapore had not provided a guarantee, we would have run the risk of funds flowing out of Singapore to other jurisdictions that had guarantees, even though our financial system was sound. The guarantee lapsed on 31 December 2010, without being triggered.
In January 2009, the Government obtained then-President S R Nathan's approval to draw S$4.9 billion from the Past Reserves for the first time to fund special schemes in light of Singapore's worst recession then since Independence. The two measures were the Jobs Credit Scheme which subsidised employers' wage bills and the Special Risk-Sharing Initiative which helped viable companies gain access to credit. The actual amount drawn for these two measures was S$4.0 billion, less than expected. This was the first time that Past Reserves were drawn.
In February 2011, the Government decided to return the S$4.0 billion that it had drawn from the Past Reserves. This is because the economy had recovered well from the recession, putting our fiscal position on a stronger footing. There is no legal or constitutional obligation for the Government to return any amount drawn from the Past Reserves.
In response to the COVID-19 crisis, the Government had to protect lives through public health measures, as well as protect livelihoods through economic and social support measures. The Government obtained President Halimah Yacob's approval to draw from Past Reserves up to $52 billion in FY2020, $11 billion in FY2021, and $6 billion in FY2022. The total draw on Past Reserves from FY2020 to FY2022 is $40 billion.
Asked & Answered
Can the President direct the investment strategies of our investment entities?
The President does not direct the operations of Fifth Schedule Statutory Boards and Government Companies (SBGCs), including MAS, GIC and Temasek.
The investment strategies of the investment entities are the responsibility of their respective Boards and managements. The Government’s role is to ensure that each SBGC has a competent board to oversee the management and ensure their respective mandates are met. The Board appointments of the Fifth Schedule SBGCs are also subject to the President’s concurrence.
The President also receives the audited annual accounts of the Fifth Schedule SBGCs, and has access to any of the information that is available to their Boards.
Read: Statement by the Minister for Law.
Did the Government provide former President Ong Teng Cheong with sufficient information to protect the Past Reserves?
A misperception that crops up from time to time is that former President Ong had been denied the information needed for him to perform an effective role in protecting the Past Reserves. President Ong was given all the information required for the purpose. This information included the value of all the Government’s financial assets, as well as a listing of physical assets, such as buildings and land.
At his 16 July 1999 press conference, President Ong spoke of how he had been informed by the Accountant-General that it would take "52 man-years" to produce the value of the full list of physical assets of the Government.
The facts of the case were explained by former Prime Minister Goh Chok Tong in Parliament on 17 August 1999, as summarised below:
The President's Office had requested a listing of physical assets from the Accountant-General on 18 Jun 1996. At a meeting with the President on 14 Aug 1996 (i.e. less than two months later), the Accountant-General provided a listing of State buildings, while the Commissioner of Lands provided a listing of State lands. Updates were subsequently sent to the President's Office.
It was at this meeting that the President remarked that to protect the Past Reserves, the reserves should ideally be denominated in dollar value. To this, the Accountant-General said that it would take 56 man-years to conduct a complete valuation of the physical assets, even though he had already produced the listing (without valuation figures).
The Attorney-General’s Chambers subsequently advised that there was no need to value all State properties at each changeover of the term of Government, as the question of whether Past Reserves were being drawn did not arise unless a piece of land was actually about to be sold off or alienated. At the point of sale, land is valued, and the Reserves Protection Framework requires only that the land be sold at fair market value.
Furthermore, the proposed valuation would be a waste of resources. First, the reality was that much of State land would remain as State land, i.e. unsold. Second, the value of each piece of land depended on planning and zoning restrictions, which the Government could change.