SINGAPORE: To pay for their children’s student care, some parents set up GIRO arrangements with Little Professors Learning Centre, expecting routine monthly deductions of fees.

Instead, they got a rude shock. Some were charged the wrong amount in certain months – and charged twice in others.

One mother, who was supposed to pay S$30 (US$24) a month, was charged S$196.80 on three occasions and S$68 once.

The Consumers Association of Singapore (CASE) received 10 complaints regarding unauthorised GIRO deductions between Jan 1 last year and Mar 16 this year.

CNA looks at how GIRO works, and whether the decades-old system has any alternatives.

What is GIRO and how does it work?

Introduced in 1984, GIRO is a three-way arrangement between consumers, banks and billing organisations – which can include government agencies, telcos, utility companies and other private firms.

The Association of Banks in Singapore issues guidelines on operating a GIRO.

The process begins when a customer applies to set up the GIRO, giving a billing organisation permission to debit their bank account, said Associate Professor Tan Chong Hui of the Singapore University of Social Sciences’ finance programme.

The customer’s bank will then verify and activate the arrangement.

While the arrangement is active, the billing organisation can submit debit requests through the GIRO clearing system, and the bank will deduct funds accordingly without needing approval from the customer.

The consumer only needs to ensure sufficient funds are available when the bill is due.

How common are GIRO errors? How do they happen?

GIRO deduction errors are uncommon, said Mrs Ong-Ang Ai Boon, director of the Association of Banks in Singapore.

Professor Sumit Agarwal of the National University of Singapore’s business school also said GIRO errors are rare.

“There are very small issues that happen, very few and far between, but systematic problems are very rare,” he said.

When asked whether errors are more likely caused by humans or systems, he said both are possible – although pinning down the cause requires knowing the specifics.

“This could be some innocuous error, but it could also be malpractice. We just don’t know,” he said.

Assoc Prof Tan said incorrect or duplicate charges typically originate from the billing organisation. The bank usually acts on the instructions given by the billing organisation.

If the billing organisation’s system generates two debit requests for the same bill, or an incorrect amount was included in the instructions to the bank, the bank would simply make the deduction as requested, he said.

What safeguards are there?

Banks validate the details in each GIRO collection instruction, including the billing organisation's crediting account and the customer's debiting account, said Mrs Ong-Ang.

These details must match the consumer's direct debit authorisation records, she said.

Customers can monitor deductions in their bank statements, and can set a payment limit for each GIRO arrangement, said Assoc Prof Tan.

However, the timing and frequency of deductions are generally determined by the billing organisation, since the payments are initiated through the billing organisation’s request.

Some banks offer GIRO-on-demand, where each deduction must be authorised individually before it is processed by the bank.

"This is a fair safeguard but consumers are required to authorise the payments on time, or risk a late fee," said CASE.

What can you do if you are charged the wrong amount?

The first step would be to contact the billing organisation, said Assoc Prof Tan.

“As it is the party that initiates the debit request, it would typically investigate the issue and arrange a correction, such as a refund or adjustment to a future bill,” he said.

If the matter is not resolved, customers can notify their bank, which can check the debit instruction and confirm whether it was an authorised deduction.

Customers can also escalate the matter to the Financial Industry Disputes Resolution Centre (FIDReC) for independent mediation and adjudication if they cannot be resolved directly with the financial institution, said Assoc Prof Tan. 

Suspected regulatory breaches or misconduct can be reported to the Monetary Authority of Singapore (MAS), he added. 

Have there been previous cases of GIRO errors?

In 2018, money was wrongly deducted from the accounts of more than 20,000 people who had insurance plans with Prudential.

Customers reported that the money taken was “100 times” their usual monthly premium, running up to “tens of thousands of dollars in some cases”.

Prudential attributed the error to "the introduction of a file format change" and said refunds were made within 24 hours.

No complaints have been made over GIRO double payments or multiple deductions in the past three years, said Mr Kenneth Har of the FIDReC in response to CNA’s queries.

However, there have been occasional disputes involving GIRO set-up issues, typically because of miscommunication between advisors and customers, he said.

What alternatives are available?

Scheduled bank transfers are a possible alternative to GIRO, but they do not serve the exact same purpose, Prof Sumit said. They work well when the monthly amount is fixed, but not when bills vary from month to month.

“Think about your electric bill, it can vary every month, so you want to do GIRO. But if you're paying the same tuition (fee) for the kids … then you don't need GIRO,” he said.

One parent whose child attended a Little Professors Learning Centre said the incident shook his confidence in GIRO payments.

Prof Sumit acknowledged that the convenience of GIRO comes with trade-offs – including some uncertainty and the possibility of fraud. Generally, however, GIRO is considered safe and secure.

Assoc Prof Tan said that GIRO is a low-cost mechanism and that many organisations have built their systems around it.

PayNow may be seen as an alternative, but the instant transfer has to be initiated by the payer, which is different from the automatic deductions offered by GIRO.

Other countries have similar direct debit arrangements and also protection for consumers.

For example, in the UK, the customer is entitled to a full and immediate refund if an error is made in the direct debit payment, said Assoc Prof Tan.

SINGAPORE: Electricity prices in Singapore are rising as global energy markets react to attacks on Qatar's Ras Laffan gas facility.

The complex is the world's largest liquefied natural gas (LNG) export hub, accounting for roughly a fifth of global supply. News of Iran's strikes on Wednesday sent European gas prices surging by as much as 35 per cent, while oil prices also spiked on fears of wider disruption to energy flows.

The impact is not limited to Europe. LNG is traded globally, and supply disruptions can quickly ripple across regions, including Asia, as buyers compete for limited cargoes.

This matters for Singapore, where 95 per cent of its electricity is generated using imported natural gas, comprising LNG and pipeline gas from neighbouring countries.

So how exactly is the disruption feeding through to electricity prices here, and what happens next?

Why is Qatar's Ras Laffan hub significant?

Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.

Ras Laffan sits at the centre of Qatar’s LNG exports, meaning any disruption there can quickly tighten global supply.

The CEO of state-run QatarEnergy said on Thursday that the latest attacks would slash Qatar's LNG export capacity by 17 per cent for up to five years, costing an estimated loss of US$20 billion in annual revenue.   

"This means that we will be compelled to declare force majeure for up to five years on some long-term LNG contracts," the minister added, using the legal term for events beyond a supplier's control that prevent it from fulfilling contracts.

Iran's attack on Qatar’s Ras Laffan facility has pushed up gas prices in both Europe and Asia, even for countries that do not import LNG directly from Qatar, said Mr Tom Marzec-Manser, director of Europe Gas & LNG at energy consultancy Wood Mackenzie.

"While we are currently in an LNG supply wave, the market is now 12mt (million tonnes) shorter than anticipated for the next few years due to the damage that has been sustained at the plant," he told CNA.

How is competition between Asia and Europe for limited LNG cargoes playing out?

Both Europe and Asia rely heavily on LNG imports, and when supply tightens, buyers in both regions compete for available cargoes, pushing prices higher.

That competition is driven by price signals. LNG is shipped globally, and some cargoes, especially those sold on short-term or spot contracts, can be redirected to markets offering higher prices.

Mr Cox told CNA's Asia Tonight that he has already seen cargoes being diverted from Europe to Asia, where spot prices are currently higher.

"As a result, particularly cargoes from the United States, which is the biggest producer in the world of LNG - they are diverted away from Europe to the Asian market. It's really a function of price signals," he said.

He added that around 10 such diversions have taken place so far, with more to come.

Why is Singapore particularly exposed?

Qatar is Singapore's second-largest LNG trading partner, importing 1,685 million kilogrammes of the gas in 2024 - 25 per per cent of total LNG imports - according to data compiled by the World Bank.

The price of Singapore's gas is linked to both international oil and gas prices, as the country imports all of its natural gas requirements, said Mr Joshua Ngu, vice chairman for Wood Mackenzie Asia Pacific.

Long-term contracts are linked to oil, and with the force majeure on volumes supplied from Qatar to Singapore, Singapore is now actively sourcing replacements, thereby increasing its exposure to the spot market, Mr Ngu told CNA.

Under long-term contracts, price changes for both piped gas and LNG will have a lag time of three to six months, depending on the contract terms, he said. This means a cargo will have a delivery price that is indexed to the average oil price three or six months before the delivery date.

On the other hand, getting replacement cargoes sourced from the spot market - in which cargoes are bought and sold at current market prices - will have an immediate price impact, said Mr Ngu.

While Singapore has the option to source cargoes from other markets such as Australia or the US - its largest and fourth-biggest LNG trading partners in 2024 - these are likely to come at a premium, said Mr David Chew, a senior consultant at energy research company Rystad Energy. 

"With global hub prices already elevated, that pricing pressure will flow through to contracted LNG as well, meaning any replacement volumes are likely to be more expensive."

Singapore's electricity market is heavily tied to fossil fuels, which is in turn based on oil and gas prices, said Mr Pang Lu Ming, vice president of gas & LNG research at Rystad Energy.

Hence, the country can expect higher electricity prices due to higher imported fuel costs from the disruption of supplies through the Strait of Hormuz, through which 20 per cent of global oil and gas supply passes.

How are higher gas prices affecting electricity costs in Singapore, and what comes next?

Singapore is already seeing the impact on fuel costs in its power market, said Mr Ngu.

He noted that the Uniform Singapore Energy Price - the half-hourly energy price in the wholesale electricity market - has increased from about S$120/MWh earlier this year to S$170/MWh over the past few days.

However, Singapore also has a Temporary Price Cap (TPC), introduced in 2023, in place to avoid high and sustained volatilities in the wholesale market, he added.

"Impact to residential customers in Singapore will be delayed as (prices) are regulated and set every quarter primarily based on fuel costs," said Mr Ngu.

He added that the retail tariff review - which is revised quarterly by the Energy Market Authority to reflect actual electricity cost - for the period from April to June will most likely be set higher to reflect fuel costs. 

Mr Ngu said tariffs are likely to remain elevated through the year if market tightness persists, particularly if the conflict drags on or further damage is done to LNG infrastructure in the Middle East.

SINGAPORE: An offshore natural gas field has become the latest flashpoint in the conflict involving the United States, Israel and Iran.

Israel struck Iranian gas facilities linked to the South Pars gas field on Wednesday (Mar 18), marking a significant escalation and drawing criticism from neighbouring Gulf states. 

Even US President Donald Trump sought to distance Washington from the attack. 

CNA looks at Israel's decision to strike the gas field, as well as its implications for the war and global energy prices. 

What is the South Pars gas field?

South Pars is the Iranian side of the world’s largest offshore natural gas field.

Located in the Persian Gulf, the reservoir is shared by Iran and Qatar. It holds an estimated 51 trillion cubic metres of usable gas - enough to supply the world’s needs for 13 years.

By targeting South Pars and its related facilities, Israel struck at the core of Iran's domestic energy supply.

The Islamic Republic relies heavily on gas to produce electricity and heat homes. The country is the world’s third-largest gas producer and consumes more than 90 per cent of its production domestically.

It is the fourth-largest consumer of natural gas in the world, behind the US, China and Russia, according to the Center on Global Energy Policy at Columbia University, even though its economy is much smaller.

According to trade publication Argus, South Pars accounts for between 70 per cent and 75 per cent of Iran's total gas production.

Tehran described the strike on its energy infrastructure as opening “a new stage in the war”, warning of further retaliation.

"If strikes (on Iran's energy facilities) happen again, further attacks on your energy infrastructure and that of your allies will not stop until it is completely destroyed," Iranian military spokesman Ebrahim Zolfaqari said, according to state media.

The attack would disrupt Iran's local energy supplies at a time when it is already dealing with substantial utility-scale energy gaps internally, said Dr Cauvery Ganapathy, a fellow at policy research think tank The Observer Research Foundation Middle East.

It is widely believed that these gaps fed into the underlying economic causes for protests against the regime before the war began, she added. 

What is the global significance of the attack?

Although South Pars mainly supplies Iran’s domestic needs, global markets reacted sharply to the risk of escalation.

The attack was “a serious escalation” due to the threat of Iranian retaliation, said Andres Cala, geopolitical analyst at energy intelligence firm Montel News.

Those fears materialised when Iran retaliated with an attack on Qatar's Ras Laffan facility - the world's largest liquefied natural gas (LNG) complex - damaging infrastructure and raising concerns about prolonged supply disruptions.

Natural gas prices in Europe surged as much as 35 per cent on Thursday while oil jumped as much as 10 per cent before paring gains.

The attack knocked out 17 per cent of Qatar's LNG export capacity, causing an estimated US$20 billion in lost annual revenue and threatening supplies to Europe and Asia, QatarEnergy's CEO and state minister for energy affairs told Reuters on Thursday.

"We are now well on the road to the doomsday gas-crisis scenario," said Saul Kavonic, an energy analyst at MST Financial. "Even once the war ends, the disruption to LNG supply could last for months or even years."

Analysts say strikes on South Pars and the Ras Laffan plant signal a dangerous new phase in the conflict.

"This latest escalation feels like a turning point for markets because the conflict is no longer just about military headlines or Strait of Hormuz closure," said Charu Chanana, chief investment strategist at Saxo in Singapore, referring to the closure of a key waterway bordering Iran's coast through which a fifth of the world's crude oil and liquefied natural gas normally flows.

"It is now hitting the plumbing of the global energy system. What is unsettling markets now is the growing stagflation risk," she added.

Attacks on energy infrastructure have a much greater material impact compared to delivery and import bottlenecks caused by the Strait of Hormuz's closure, Dr Ganapathy told CNA.

"The recovery from such attacks takes much longer due to the inherent nature of the industrial engineering of these plants," she said. 

She foresees the loss of Qatar's exports having an impact across geographies.

This includes Europe, which diversified its Russian dependence to Qatari supplies, and Asian countries, which started centring their energy portfolio diversification to include natural gas in a more central role as a bridge fuel in both industry and transport, as well as a part of their energy transition, she explained.

"Price spikes will result not just from scarcity in the markets as a direct consequence of this attack ... but also due to countries now seeking to stockpile at an urgent pace," she added. 

If attacks on the Middle East's energy infrastructure continue, it will have devastating consequences for global prices, said Mr Lawrence Anderson, a senior fellow at the S Rajaratnam School of International Studies.

Non-energy-producing countries like Singapore would be particularly affected, he told CNA.

Why attack South Pars now?

The strike was likely aimed at increasing pressure on Tehran. 

Mr Anderson noted that despite losses to its leadership and military assets, Iran has shown surprising resilience.

“Israel was likely trying to place further pressure on the regime to capitulate,” he told CNA. “This, for now, has proven to be a bad miscalculation and prompted Iran to retaliate.”

Qatari, Emirati and Saudi energy facilities bore the brunt of Iran’s retaliation on Wednesday, with Qatar criticising Israel's attack as "dangerous and irresponsible".

The United Arab Emirates also offered a rare rebuke, calling it a "dangerous escalation".

"Targeting energy infrastructure poses a direct threat to global energy security," the UAE foreign ministry said.

Even US President Donald Trump distanced himself from the attack, stating on Wednesday that his country knew nothing about the South Pars strikes.

Trump said on Thursday that he told Israeli Prime Minister Benjamin Netanyahu not to repeat the attack on energy infrastructure.

"I told him, 'Don't do that', and he won't do that," he told reporters in the Oval Office.

What does Trump’s response show about the US and Israel’s approaches to the war?

The episode has also highlighted differing approaches between Washington and Israel.

While Israel sees Iran as a potentially existential threat, analysts said the US is more focused on avoiding a drawn-out war that could impose high economic costs and damage alliances.

Washington is far more exposed to the economic fallout, particularly rising oil prices and market volatility.

This could have major political consequences for Trump ahead of the congressional elections.

“Trump must be furious at the impact on energy prices with the mid-terms (elections) only months away,” said Mr Anderson.  

“This, however, will not undermine the US-Israeli alliance, which remains committed to crippling Iran's nuclear ambitions, missiles, drone supplies and support for its terrorist proxies.”

Analysts say Israel may also be more willing than the United States to tolerate instability in Iran, calculating it would face far less regional fallout, especially after the weakening of its proxies Hamas and Hezbollah over the past three years.

"The objectives that have been laid out by the president are different from the objectives that have been laid out by the Israelis," Tulsi Gabbard, Trump's director of national intelligence, acknowledged in a congressional hearing this week.

Robert Malley, who negotiated with Iran under former president Joe Biden, said that both Israel and Iran had clear goals, with Israel wanting to sow the Iranian government's collapse and Tehran seeking to survive and to externalise the costs of the war.

The unpredictable actor is Trump, who has said both that the war will be short or will intensify and sees world affairs in deeply personal terms, particularly on whether he can claim victory.

"He's offered a series of shifting goals, not just day by day but often hour by hour," said Malley, now a senior fellow at the Yale Jackson School of Global Affairs.

Yossi Mekelberg, a Middle East expert at London-based think tank Chatham House, said that Israel and the US started with an aim of regime change before encountering the heavy counter-attack by Iran.

"When things go wonderfully well, everyone is happy, you know - they all praise each other," he said.

"If it starts going really wrong, and we know that Trump is not the sentimental type, then the blame starts flying," he said.

SINGAPORE: When the Middle East conflict erupted, oil markets reacted almost instantly – and Singapore motorists felt it within days.

Petrol prices have surged by as much as S$0.40 (US$0.30) a litre in under a week, with some grades now crossing S$4 a litre for the first time in years.

Global oil prices have swung violently in both directions. Brent crude, the international benchmark, climbed above US$119 on Monday (Mar 9) before tumbling below US$90 after US President Donald Trump said the war could end "very soon".

For drivers already feeling the pinch, it comes down to this: why did prices spike so fast, will they come back down, and how quickly? CNA breaks it down.

How much have pump prices risen?

A week ago, most Singapore drivers were paying S$2.88 per litre for 95-octane fuel. 

As of Tuesday, the price per litre has sailed past S$3 – Caltex is charging S$3.35, Shell and Esso S$3.31 and SPC S$3.14. For premium fuel, Shell is charging S$4.05 a litre.

Filling up a Toyota Noah Hybrid – a popular seven-seater family car – now costs about S$155, up from S$140 just weeks ago, said Mr Kenneth Lee, treasurer of the Vehicle Rental Association.

For private-hire drivers, the pain is real. “Paying an extra S$15 every time the driver refuels might not sound like a big deal for day-to-day drivers, but if you are on the road every day, the extra cost piles up very quickly by the end of the month,” Mr Lee said.

What's actually driving prices up?

The spike is not about oil running out. The problem is getting it out of the region, an analyst said.

“Kuwait has oil, Saudi has oil. But they can't get their oil out of the region because tankers are not willing to transport the oil for them at this point in time, because of the dangers in the Strait of Hormuz,” said Mr Sim Moh Siong, a commodity strategist at OCBC.

With concerns about shipping risks, insurance premiums have gone up. Financial markets have also priced in further risk before any actual shortage has materialised.

“Much of the recent increase reflects precautionary risk premiums and uncertainty … rather than an actual drop in global oil supply,” said Ms Sheana Yue, senior economist at Oxford Economics.

Will prices fall when the fighting stops?

Even if a ceasefire were to be declared, prices are unlikely to return immediately to pre-conflict levels, said Mr Brian Lee, an economist at Maybank Securities.

For one, shipping capacity through the Strait of Hormuz will take time to recover due to lingering security concerns and high insurance costs. 

Countries in the region, including China – a key petrol supplier – have fuel export suspensions in place, which may curb supply, he said. 

Damaged energy production infrastructure also needs to be rebuilt. This means it will take time for production and exports to resume, Mr Lee added.

Oil flow from the ground may have been disrupted too, said OCBC's Mr Sim. “Once you shut in, depending on the length of the shut-in, it might be very difficult to bring output back online,” he said. 

So what should drivers expect?

For motorists, this means volatility – likely until the middle of this year.

Ms Yue said pump prices may stabilise or gradually decline if tensions ease, but warned: "If oil prices remain elevated, motorists could see persistently higher prices for several months."

In the meantime, motorists are hunting for discounts and tracking prices more closely. For private-hire drivers, fuel is one of their largest daily expenses.

“In order to make the same amount of income as they did in previous months, they will now have to stay on the road for longer hours, away from their families,” said the Vehicle Rental Association’s Mr Lee. 

“We are hearing a lot of genuine concern from them right now.” 

Iran's Shahed drones are playing a major role in its war against the United States and Israel. 

Tehran unleashed hundreds of missiles and drones across the Middle East following US and Israel strikes on Saturday (Feb 28), underscoring just how central these systems have become to its military playbook.

Some of these drones flew as far as the British Royal Air Force base in Akrotiri, Cyprus, striking the runway - a sign of their extended reach.

Already widely used by Russia in the war in Ukraine, Shahed drones are now back in focus amid escalating tensions in the Middle East. 

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In a notable shift, the US has also begun fielding low-cost one-way attack drones modelled after Iranian designs.

What are Iran’s Shahed drones?

Shahed (meaning witness in Farsi) drones are low-cost, one-way-attack unmanned aerial vehicles developed by Iran. 

Often referred to as "kamikaze" or "suicide" drones, they function essentially as guided missiles that fly towards a pre-designated target and explode on impact. 

Their key advantage is scale. Produced in large numbers, swarms of Shahed drones can overwhelm air defences by saturating them from multiple directions at once. 

While ballistic and cruise missiles fly much faster and pack a bigger punch, they cost millions of dollars each and are available in far smaller quantities. 

A Shahed drone, by contrast, is estimated to cost between US$20,000 and US$50,000 - a fraction of the price of a ballistic missile.

The drones have a flight range of at least 2,000km and can travel at speeds of around 180kmh.

Ukrainians have dubbed them “mopeds” for their distinctive buzz.

Why is the US adopting similar drones? 

For the first time in combat, the US military said it has deployed low-cost, one-way attack drones against Iranian targets.

The US Central Command (CENTCOM) said the drones, which are expendable but cheaper than traditional missiles, were based on lessons drawn from Iran's own technology.

"These low-cost drones, modelled after Iran's Shahed drones, are now delivering American-made retribution," CENTCOM said in a statement on X. 

The drones are inexpensive and are meant to be produced by several manufacturers, the Pentagon has said.

Photos released by the Pentagon suggest that the drones resemble the LUCAS (Low-Cost Unmanned Combat Attack System) manufactured by Phoenix, Arizona-based Spektreworks. 

"The US’ use of LUCAS drones against Iran is significant because these drones are reverse-engineered from Shahed-136. Essentially, the US is giving Iran a taste of its own medicine," said associate research fellow at the S Rajaratnam School of International Studies (RSIS) Liu Mei Ching.

The shift also reflects a growing emphasis on cost efficiency.

"Simply put, the United States does not possess unlimited resources. It is far more cost-effective to deploy a LUCAS drone … for about US$35,000 apiece, as opposed to using Tomahawk cruise missiles, for roughly US$2.5 million apiece for the latest versions," said Steve Feldstein, a senior fellow at the Carnegie Endowment for International Peace.

Analysts said the use of both the Shahed and the LUCAS represents an emerging trend.

"Cost has become a decisive factor in weaponeering, and militaries are increasingly pivoting towards using drones, which are equipped with just good enough precision, to achieve various operational objectives," Liu added.

How crucial are Shahed drones in warfare?

Iranian drone designs have demonstrated their effectiveness in Ukraine, analysts said. 

After reaching a deal with Tehran to import Shahed drones early in the Russia-Ukraine war, Russia later localised their production, investing US$2 billion in setting up a dedicated factory to produce these drone models.

Russian engineers have increased its altitude, made it more jamming-resistant and fitted it with more powerful warheads. The Russian defence ministry has also said it is turning its drone force into a separate military branch. 

“It should come as little surprise that the United States would emulate this design as well,” Feldstein said in comments published on the website of Carnegie Endowment for International Peace.

By using large numbers in a single attack, Moscow’s strategists seek to overwhelm Ukrainian air defences. Russia has battered Ukraine with hundreds of drones in a single night – more than what were used during some entire months in 2024.

“These drones are causing extensive damage to Ukraine’s critical infrastructure and are a major problem for Ukraine’s defenders, based on the sheer volume,” said Dara Massicot, senior fellow at the Carnegie Endowment for International Peace.

The war in Ukraine has pushed the US and other countries towards a new strategy known as "affordable mass" - prioritising large quantities of relatively cheap systems.

If the conflict in the Middle East drags on, resource constraints will become a bigger factor, Feldstein said. Stockpiles of expensive air defence interceptors are finite - and difficult to replenish quickly - which could heighten the strategic value of cheaper, mass-produced drones.

RSIS' Liu said that while the drones are not powerful enough to bring down buildings, they can cause damage to utility and critical energy infrastructure.

She pointed to Iran's drone strike on Saudi Arabia's biggest domestic oil refinery on Monday, forcing it to halt operations.

"Shahed drones are and will continue to be an important feature of Iranian tactics in the Middle East conflict," Liu told CNA.

Are US and Middle East defences able to deal with Shahed drones?

Shahed drones are relatively slow and noisy compared with ballistic missiles, making them easier to detect and track. 

Air defence systems such as the US-made Patriot, Israel’s Iron Dome and various short-range interceptors are capable of shooting them down. Fighter aircraft can also be used to intercept them mid-flight.

“The methods are effective, but targeting drones in this way is resource-intensive and expensive, and it will drain certain types of interceptors quickly,” Massicot noted. 

“Patriot interceptors in particular must be used against ballistic missiles, and strains to stockpiles will emerge if they are used too extensively against Shaheds.”

So the challenge is less about capability and more about economics and scale.

Iran typically launches drones in waves, often alongside ballistic or cruise missiles. This forces defenders to divide attention and interceptors between multiple threats at once. Ballistic missiles - which travel much faster and pose a greater destructive risk - must take priority. That leaves cheaper drones competing for expensive defensive resources.

There is also the question of coverage. 

While high-value military facilities are typically protected by layered air defence networks, critical infrastructure or softer targets may lack sufficient point defences.

“(The US military and its partners) still need additional low-cost point defences at key facilities, in order to complete layered defences against Shahed drones - particularly for a prolonged, high-intensity conflict,” Massicot said. 

Liu pointed out that air defence systems alone may be insufficient to sustain a defence against protracted drone warfare or drone swarm attacks. 

Other capabilities, such as electronic warfare equipment which can be used to jam and spoof drones, are needed to withstand such attacks, she said. 

SINGAPORE: Central Provident Fund (CPF) members will soon have the option of a simpler, low-cost way to invest their savings when a new life-cycle investment scheme rolls out in 2028.

The voluntary investment scheme was announced by Prime Minister Lawrence Wong during the Budget 2026 statement on Thursday (Feb 12).

It will complement the existing system by catering to long-term investors who are willing to take some risk without having to actively manage their portfolios, the CPF Board said.

CNA looks at how the new scheme will work, and who it might benefit.

How the investment scheme works

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Life-cycle investment products work by automatically rebalancing investors' portfolios towards less risky assets as they approach a target date, such as retirement age.

The assets will be progressively liquidated in phases by the target date, for example, when the investor turns 65 and becomes eligible for CPF payouts.

This is to calibrate the investment risk that CPF members are exposed to at different stages of life, and reduce the risk of large losses from exiting during a downturn. 

Mr Ling Seng Chuan, head of financial planning, investment and insurance at DBS, said this is known as a glidepath strategy.  

"The beauty of the glidepath strategy is it customises to your age. The younger investor gets more exposure to equities and those nearing retirement get the stability from fixed income," he said.

"Having said that, if you start early, you should benefit more from risk and potential return perspective," he added.

Upon liquidation, the investment sale proceeds will be transferred to the CPF member’s Retirement Account up to the full retirement sum. Any remaining proceeds will be transferred to the Ordinary Account.

All-in fees, which include total expense ratio, wrap fees and distribution costs, will be capped to minimise costs and allow investors to retain and benefit from more of their investment returns, the CPF Board said. 

Why a new investment scheme now?

The new scheme is a response to the CPF Advisory Panel’s recommendation for the Lifetime Retirement Investment Scheme, which the government accepted in 2016.

The CPF Board said the government had to study ways to offer members a more structured investment option, while striking the right balance between risk and return.  

The board noted that several factors now make it timely to introduce the new scheme.

This includes technological developments and the rise of digital platforms, which have reduced the cost of products and have made it easier to automatically rebalance an individual’s portfolio.

Internationally, there has also been a growing adoption of life-cycle investment products, the CPF Board said.

To simplify decision-making for investors, the CPF Board said it is looking to select two to three product providers to offer a small number of options.

“The government’s role is to safeguard investors’ interests through regulatory oversight and act as a gatekeeper for quality investment products, while keeping investment costs low,” the board said.

How would the scheme fit in with current options? 

Currently, members can choose to invest part of their CPF savings through the CPF Investment Scheme (CPFIS), which offers more than 700 investment products. There is generally a higher fee cap than the new investment scheme, the CPF Board noted. 

The take-up rate for CPFIS has been relatively low. As of September last year, 28.1 per cent of CPFIS-eligible members had active investments in their CPFIS-Ordinary Account. The figure stood at 22.1 per cent for CPFIS-Special Account.  

CPF members may also leave their savings in their ordinary account (OA) and special account (SA), which have a base interest rate of 2.5 per cent and 4 per cent per annum, respectively. 

Analysts noted that CPF’s new investment scheme offers a middle ground between current options and provides more options for members.

“So if you are the conservative type that does not even want to see any market cycle, you still can keep (your funds) in the CPF OA and SA account … Then if you have a higher, aggressive risk profile, you can participate in the CPFIS,” said Mr Alfred Chia, CEO of financial advisory firm SingCapital. 

Most CPF members are likely to be in between, he said, noting that the new scheme can help members improve their long-term retirement adequacy. 

He added that while private fund managers will manage the funds, the larger scale of the scheme would allow them to lower expense ratios.

As such, investors would benefit from lower investment costs, he said. 

Who will the scheme be most suitable for?

Ms Li Huijing, head of investment management at financial adviser MoneyOwl, said the simplified set of options under the new scheme will be useful for members who wish to take some market risk, but lack the time or expertise to actively construct and manage their own portfolios.

She added that they should also have longer investment time horizons – ideally 15 to 20 years or more before retirement.

“With time on their side, they are better positioned to ride through market cycles and benefit from compounding,” she said.

The CPF Board said there will be no age limit for joining the scheme, although members with a longer runway are more likely to benefit.

Members with a shorter investment runway, including older members, can continue to benefit from risk-free CPF interest rates of up to 6 per cent on CPF balances, it said. 

What type of returns can investors expect?

Details on projected returns from the new scheme are not available yet.

In general, potential returns on investments should be commensurate with the risk of the underlying assets, the CPF Board said.

From March, the CPF Board will engage the industry on the product specifications and invite expressions of interest. It will work with independent investment consultants to evaluate applications.

Providers will be required to provide details that include illustrative returns matching the products' risk profiles, the CPF Board said.

DBS’ Mr Ling said such diversified solutions, which are also offered at DBS, are expected to generate about 5 to 6 per cent returns, annualised over the long term. This accounts for strong years and average ones, he added.

Ms Li noted that target date funds in other countries tend to yield around 5 per cent per annum over the long-term, which is broadly comparable to the returns of a balanced portfolio.

“That said, such returns are not guaranteed and the scheme is not risk-free. Returns will fluctuate with market conditions and may not consistently exceed the relatively stable interest rates credited to the Special and Retirement Accounts,” she said.

What should investors consider before applying?

Experts noted that members should consider their own risk appetite before investing.

The investment scheme, as with all investment products, carries risks, and returns are subject to market conditions.

By choosing to invest, members should recognise that they are exchanging government-backed interest rates for market-based returns that may fluctuate, Ms Li said.

“They should be aware of potential drop in market value in the short-term and be aware not to panic and sell at a loss,” she said.

She added that the new investment scheme is designed to be long-term in nature. As such, the CPF savings to be invested should not be needed for shorter-term needs, such as housing.

Ultimately, Mr Chia said that the new scheme not only gives members more options, but also acts as a reminder to start planning for retirement.

“If we have a longer time to actually plan for it and save for it, then retirement planning actually is not difficult. But we have to start early,” he said.  

SINGAPORE: Despite government projections that economic growth would slow as Singapore's economy matures, the country has defied expectations for two consecutive years.

In 2025, Singapore's economy expanded 5 per cent, exceeding forecasts even after the Ministry of Trade and Industry (MTI) upgraded its projections twice – in August and November. The year before, growth hit 5.3 per cent.

This marks the first time since 2010 and 2011 that Singapore has sustained annual growth above 5 per cent for two straight years.

On Tuesday (Feb 10), MTI raised its 2026 forecast to between 2 and 4 per cent, up from the previous forecast of 1 to 3 per cent.

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CNA examines what drove this exceptional performance and whether Singapore can maintain its momentum.

How did Singapore do so well?

MTI attributed 2025's robust GDP expansion primarily to manufacturing, wholesale trade, and finance and insurance sectors.

The electronics cluster and machinery, equipment and supplies segment experienced particularly strong growth, driven by surging demand for artificial intelligence-related electronics. 

Accommodative financial conditions supported growth in the finance and insurance sector.

Ms Selena Ling, chief economist and head of group research at OCBC, highlighted "very broad-based sectoral growth", citing robust foreign direct investment and safe haven capital inflows into Singapore.

Beyond semiconductors, construction remained resilient with strong public and private sector pipelines, while pharmaceuticals also contributed significantly, she added.

Singapore also benefited from "competitively lower" tariffs on exports to the United States compared to other Southeast Asian economies, Ms Ling noted.

Standard Chartered economists said relatively benign global monetary and fiscal conditions, robust AI-related demand, tariff truces and lower effective tariff rates likely combined to boost economic activity.

How unusual is this performance?

Economists agreed that Singapore's GDP performance over the past two years has been exceptional for a developed economy.

In recent history, Singapore has only recorded such high growth rates when recovering from major crises, said Ms Lee Yen Nee, senior country risk analyst at BMI Research.

"Last year, this growth rate was achieved without a preceding crisis, and it was almost entirely driven by the global capital spending on AI," she said, adding that while electronics manufacturing benefitted most, spillover effects reached services sectors involved in goods movement.

Ms Sheana Yue, senior economist at Oxford Economics, called it "particularly exceptional" that Singapore's economy expanded by 5 per cent despite "heightened external challenges amid US tariff hikes".

In April last year, MTI downgraded its GDP forecast to between 0 and 2 per cent on fears that US tariffs would severely impact Singapore.

Ms Lee said Singapore appeared largely shielded because semiconductors, pharmaceuticals and many high-tech products remained exempt from tariffs.

"Singapore’s high exposure to these areas means that the economy is largely shielded. Furthermore, Singapore benefitted from the flurry of front-loading activity to beat the implementation of higher US tariffs," she added.

Did other Asian economies see similar growth?

Several Asian economies also recorded strong growth in 2025, economists noted.

Taiwan's economy grew 8.63 per cent – its fastest pace in 15 years – while Malaysia's advance estimates indicated 4.9 per cent growth.

"The main driver was exports and investment related to electronics, AI in particular," said Ms Yue, describing Taiwan and Malaysia's performance as "stunning".

The surge in demand for AI products, coupled with tariff-related front-loading, benefited the wider Asian region where high-end chips are produced, she said.

Ms Yun Liu, senior ASEAN economist at HSBC, pointed out that Singapore's growth was almost the same as what Indonesia reported, and that Vietnam grew around 8 per cent.

Why did forecasts underestimate growth?

Singapore initially underestimated AI-related electronics demand, acknowledged Ms Yong Yik Wei, chief economist at MTI, during a media briefing on Tuesday.

"We underprojected because it's quite a nascent technology, and it's quite hard to get the exact trajectory with a high level of precision. So on hindsight, we did underproject that strength in the AI demand," she said in response to CNA's question about the ministry's two forecast upgrades last year.

That demand created positive spillover effects into related sectors such as wholesale trade, she added.

Tuesday's forecast upgrade takes into account "sustained momentum" in AI investment, aligning with the Economic Strategy Review committees' recommendations for Singapore to establish itself as a global AI leader.

MTI also underestimated pharmaceutical output due to unexpectedly large production of a high-value active pharmaceutical ingredient, Ms Yong said.

"It's actually quite difficult to forecast pharma output because it's quite volatile because of the nature of the production process," she said.

Can Singapore sustain this growth?

Analysts caution that maintaining similar growth in 2026 will be challenging, particularly given 2025's high baseline.

"If Singapore’s AI hub ambitions can materialise, then it is possible to see slightly better-than-expected growth potentially exceeding 3 per cent ... but 5 per cent may be a bit of a stretch," said Ms Ling of OCBC.

Ms Yue of Oxford Economics pointed to emerging slowdown signs, noting fourth-quarter GDP growth declined from the third quarter.

External sector risks, uneven domestic activity and a softening labour market could weigh on private consumption momentum, she added.

However, the Singapore Economic Development Board (EDB) remains optimistic about AI's prospects.

"One of the strengths for Singapore is really in our industry verticals. We have various strengths in key sectors, for example, semiconductors, in electronics, in healthcare and so on, that provides for that fertile ground for AI (application)," said Ms Jillian Lim, executive vice-president at EDB.

With leading tech companies establishing operations in Singapore, she expects AI to remain an important growth area.

"We do expect that AI will be a key pillar and a growth area for us that will sustain," she said.