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Letter to Straits Times: Temasek protects its past reserves

23 December 2017

We agree with Mr Tan Yip Meng (ST, 18 Dec 2017) that Singapore's reserves play an existential role in the survival of our nation.

Under the Singapore Constitution, each Fifth Schedule entity, like Temasek, is separately accountable to the President for the protection of its own past reserves. Conceptually, each entity carries and protects its own basket of eggs.

Temasek does not manage Singapore Government reserves, nor any CPF savings. Our past reserves, which include past earnings, had been accumulated in Temasek during past terms of Government. 

We work to grow our reserves responsibly and sustainably. Our portfolio has more than tripled over the last 15 years. 

Under the Net Investment Returns framework, the Government may spend up to 50% of our expected long term returns. Sustainable returns of a larger portfolio means more headroom for Government budget spending. 

Temasek pays taxes on its earnings, and distributes dividends to its shareholder. Taxes add to Government revenues for budget spending; dividends add to the Government’s past reserves. 

Temasek is also a company governed by the Singapore Companies Act. The President does not direct our investment or business decisions or those of our portfolio companies. Neither does the Minister for Finance, whether as our sole shareholder, or as representative of the Government. However, we do need to seek Presidential approval where a transaction is likely to draw on our past reserves. 

Our duties to protect our past reserves include ensuring that every disposal of investment is transacted at fair market value. To date, Temasek has not drawn on its past reserves. 

We have an ethos as investor, institution and steward to do well, do right and do good. Thus, we also contribute through our family of Temasek Foundations to help build people, build communities, build capabilities and rebuild lives in Singapore and the region. 

As Mr Tan pointed out, Singapore’s reserves are sacrosanct and must be protected at all costs. We totally agree.


Leong Wai Leng
Chief Financial Officer
Temasek Holdings 



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