Answer for Oral Question PL237

QUESTION

Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd. Rahman bin Haji Ibrahim

YANG BERHORMAT PEHIN ORANG KAYA LAILA SETIA DATO SERI SETIA AWANG HAJI ABD. RAHMAN BIN HAJI IBRAHIM asked the MENTERI DI JABATAN PERDANA MENTERI to state what percentage of local workers were affected during the implementation process of the downsizing exercise by companies in this country. How are the relevant agencies working together to monitor the safety-net for these workers? Are training/skills upgrading initiatives provided to avoid prolonged impacts on their lives, socioeconomics and family circumstances?

ANSWER

Yang Berhormat Menteri di Jabatan Perdana Menteri

Yang Berhormat Yang Di-Pertua,

بسم الله الرحمن الرحيم
السلام عليكم ورحمة الله وبركاته

Yang Berhormat,

i. The Government understands Yang Berhormat’s concerns regarding local workers affected by business strategy adjustments in the upstream oil and gas sector. This concern is in line with the Government’s priority, which takes seriously the need to ensure the welfare of the people continues to be safeguarded, particularly in the aspects of employment and socioeconomic stability.

ii. Allow Kaola to provide some explanation regarding the latest developments related to the business strategy adjustment process currently being implemented by several companies in the upstream oil and gas sector. Workforce releases occurring in the upstream oil and gas sector mostly involve contract workers, whose service contracts are not renewed or whose project-based contracts are terminated once projects are completed.

iii. In addition, the number of jobs has also been affected by the consolidation of service scopes and changes in human resource requirements. The consolidation of those service scopes is among the operational optimisation measures taken to ensure companies remain resilient and competitive in the increasingly challenging energy sector landscape.

iv. The business strategy adjustment process currently being experienced in this sector is projected to affect around 10% of the total nineteen thousand eight hundred and fourteen (19,814) workforce in upstream oil and gas service companies over the next two years. However, they still have the opportunity to be absorbed through a roll over initiative after new service companies are appointed.

v. Yang Berhormat, Kaola should also explain that business strategy adjustments are important to ensure companies in the oil and gas sector remain competitive. Companies such as Brunei Shell Petroleum (BSP) have also introduced initiatives offering voluntary early retirement packages, enabling some participating employees to contribute to the national economy through other channels, for example by engaging in business activities. In 2025, a total of one hundred and thirty-nine (139) BSP employees applied, and one hundred and thirty-three (133) of them were approved to take this package, representing about 3% of BSP’s total workforce.

vi. In this regard, the Department of Energy will continue to give serious attention to the welfare of affected local workers, and remains committed to implementing appropriate mitigation measures. Among the initiatives currently and continuously implemented are interventions by the Department of Energy when receiving new applications and renewing foreign worker permits for the energy sector through scrutiny of the skill sets of foreign workers and recommending their replacement with qualified local workers, as well as job rematching through close cooperation with industry partners and the Brunei JobCentre (JobCentre Brunei). As a result of these efforts, several local workers have successfully replaced foreign worker positions, and several local workers have also successfully obtained employment in the non-oil and gas sector.

vii. However, there are several challenges in the redeployment of affected workers, including lower wage rates outside the oil and gas sector; transport difficulties, especially for jobs outside Belait District; long and tiring commuting distances; as well as high competition in the job market. To address these challenges, the Department of Energy, in cooperation with service companies, is also working to prepare local workers through upskilling and reskilling programmes to ensure that local workers are able to compete in today’s job market.

Yang Berhormat,

viii. Fundamentally, avoiding long-term effects on the lives, socioeconomics and family circumstances of workers depends on two matters: first, the type of job opportunities that will exist in the future; and second, the effort and readiness of workers to adapt to the skills required to fill those opportunities. Retraining and skills upgrading tailored to the actual needs of the labour market, as well as joint planning with stakeholders such as JobCentre Brunei, are the best approaches to provide long-term and sustainable solutions in addressing workforce adjustment issues.

ix. In the long term, the Department also collaborates with the Ministry of Education and higher education institutions such as Universiti Brunei Darussalam (UBD), Universiti Teknologi Brunei (UTB), Institute of Brunei Technical Education (IBTE) and Politeknik Brunei to ensure that curricula and study programmes are aligned with the current and future needs of the energy sector. This effort, insya-Allah, will open pathways to broader and more competitive career opportunities for our local children, including in the downstream sector, electrical energy and renewable energy, in line with the country’s aspiration to expand the energy sector and support the economic diversification agenda of Negara Brunei Darussalam.

QUESTION

Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd. Rahman bin Haji Ibrahim

YANG BERHORMAT PEHIN ORANG KAYA LAILA SETIA DATO SERI SETIA AWANG HAJI ABD. RAHMAN BIN HAJI IBRAHIM asked the MENTERI DI JABATAN PERDANA MENTERI DAN MENTERI KEWANGAN DAN EKONOMI II to state whether there are plans by the Central Bank (BDCB) to update the regulations governing Financial Institutions, particularly those that can further stimulate economic activity, increase the level of domestic investment, help the growth of local MSMEs, open up more employment opportunities and ease the repayment burden for borrowers. This is considering that the banking sector is one of the catalysts towards generating sustainable economic growth.

ANSWER

Yang Berhormat Menteri di Jabatan Perdana Menteri dan Menteri Kewangan dan Ekonomi II

Thank you Yang Berhormat Yang Di-Pertua, Assalamualaikum warahmatullahi wabarakatuh and greetings.

Kaola would like to express appreciation for the question from Yang Berhormat Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd. Rahman bin Haji Ibrahim.

In carrying out its role in safeguarding the stability of the financial sector, Brunei Darussalam Central Bank (BDCB) actively ensures that the existing regulatory framework remains conducive to the development of the domestic financial market, thereby supporting sustainable economic growth.

In line with this, BDCB will continue to assess and ensure that the suitability of the overall regulatory framework remains relevant, to preserve the sustainability of financial institutions in this country and to ensure that financial consumer protection is always maintained.

This includes adjustments to the existing framework to ensure that it is aligned with the latest standards developments and international banking best practices. In this effort, BDCB will continue to undertake various consultations with the industry and stakeholder engagement to obtain feedback before any regulations are enforced.

In this regard, several developments in the implementation of various initiatives undertaken by BDCB, as well as outcomes supporting broader economic strengthening, would like to be shared.

First, in terms of further stimulating economic activity and increasing the level of domestic investment:

• As a starting point, banks in Negara Brunei Darussalam remain in a strong and stable position to support economic growth. Banks in this country also maintain sufficient liquidity levels to be used as productive assets to support any financial intermediation activities.

• One of these is by channelling that liquidity into productive lending through the provision of a reasonable Single Borrowing Limit. Compared with several other countries, the Single Borrowing Limit regulation in Brunei Darussalam is more flexible. This flexibility gives room for BDCB to assess and ensure that economic projects with the potential to support national development can be given appropriate financing.

• In addition, banks in this country still have the opportunity to finance large projects through syndicated loans or on a consortium basis. Such financing is considered more prudent from a credit management perspective because the credit risk exposure is shared and not limited to only one bank. Besides providing equal opportunity, it also reduces concentration of risk on a particular bank.

• BDCB also continues to undertake important reviews of existing regulations. One result of this effort includes reducing the Minimum Cash Balance requirement ratio from 6% to 5% in February 2025 (effective April 2025) to support and enable banks to increase productive lending funds to businesses and households. This update aims to provide flexibility to banks in managing their daily liquidity more efficiently. However, the implementation of both the Single Borrowing Limit and Minimum Cash Balance is subject to certain criteria being fulfilled first.

• As the regulator of the financial sector, BDCB also continuously ensures that financial institutions keep providing financial services that are accessible and reliable. BDCB will also continue to monitor the position of the financial industry so that it remains strong and resilient to support beneficial activities and those with spillover effects to the economy of Negara Brunei Darussalam, including government projects. BDCB will also continue to introduce prudent regulations in line with international standards to ensure financial institutions remain safe and sustainable.

Second, in terms of helping the growth of local MSMEs and opening up more job opportunities, BDCB has already taken several important steps to ensure a conducive environment for businesses in Negara Brunei Darussalam, particularly in supporting the growth of the micro, small and medium enterprise (MSME) sector. Among the measures implemented are:

• To facilitate access to financing for MSMEs, several initiatives to further strengthen the relevant financial infrastructure have been introduced, such as the Credit Bureau System (2012), Collateral Registry (2016), and Credit Score (2018). These initiatives have helped provide a more objective credit assessment process, the use of movable property as collateral, as well as increased confidence of financial institutions in the borrower’s credit profile.

In addition, the issuance of the Notice on Equity Based Crowdfunding (ECF) Platform Operators and Notice on Peer-to-Peer Financing (P2P) Platform Operators (2017 & 2019) sets out the requirements for any company wishing to operate ECF and P2P platforms in Negara Brunei Darussalam. These notices open up alternative financing opportunities for start-up companies and MSMEs to raise capital through ECF and P2P platforms, while further enhancing the growth and development of the capital market sector.

Although lending activities to businesses are driven by demand from businesses and are subject to the bank’s risk appetite, BDCB will ensure that the regulatory framework or banking regulations do not complicate lending to MSMEs, where BDCB’s regulations on businesses are mostly more relaxed compared with regulations on individual personal customers. For example, lending regulations for individual personal customers are controlled whereas the risk weighting for loans to MSMEs is given flexibility under the Capital Adequacy framework, subject to conditions.

• In supporting the national digital economy efforts and providing opportunities for MSMEs to explore start-up fields in the financial technology (FinTech) sector, initiatives such as the BDCB FinTech Regulatory Sandbox allow companies, especially start-ups, to test FinTech products in a more flexible environment.

In addition, with the establishment of the Mekar Fintech Innovation Centre as a hub for collaboration and innovation, PMKS also have the opportunity to develop new financial solutions and expand their businesses in an increasingly growing digital ecosystem.

• To help the Government understand the actual conditions and challenges of businesses through data and monthly reviews, BDCB has published the Business Sentiment Index (BSI) every month since December 2021, which measures the level of business sentiment and confidence in Negara Brunei Darussalam. It can also help the Government formulate more effective policies and channel more targeted support to sectors in need.

Third, in terms of easing the repayment burden for borrowers, BDCB has implemented the Total Debt Service Ratio, which plays an important role in ensuring that borrowing levels remain prudent. Enforced on 8 June 2015, the introduction of this Total Debt Service Ratio aims, among other things, to control the level of exposure of financial institutions to credit risk in extending credit to the household sector while protecting borrowers from becoming trapped in uncontrolled debt to the point of not having sufficient salary balance to cover their daily expenses. In addition, the Total Debt Service Ratio regulation also aims to ensure that banks and finance companies are able to provide quality, resilient and competitive credit lending services.

Since the Total Debt Service Ratio was enforced, BDCB has made several amendments to this regulation, in line with the current economic and market environment, including the following:

• BDCB has expanded the types of monthly income included in calculating the borrower’s Total Debt Service Ratio limit. In this regard, monthly pension income, rental income and income from sole proprietor businesses may be considered by banks and finance companies in calculating net monthly income, subject to certain conditions.

• Since 9 November 2017, BDCB has also provided flexibility in the Total Debt Service Ratio policy where banks may exceed the maximum 60% limit for certain credit facilities. This includes mortgage equity financing facilities, but is subject to several conditions (such as the pledged property must generate income and must not be the borrower’s only property). This amendment is also given to fully secured credit facilities such as those secured by cash and fixed deposits.

These amendments can be utilised by borrowers who are retired or pensioners or persons who earn non-fixed income. At the same time, BDCB will continue to monitor the regulations issued to ensure their effectiveness. This is also to help increase more economic activity.

At the same time, Bank Usahawan Sdn Bhd, established by the Government in 2017, also complements the composition of banking institutions and acts as a strategic channel to bridge the gap in supplying financial products and services needed by MSME enterprises in this country.

In helping the growth of local MSMEs, Bank Usahawan is active in providing financing facilities to PMKS enterprises in this country through asset financing and working capital financing, which have been extended to various MSME sectors, mostly to the services, manufacturing, and traders sectors.

To help ease the repayment burden for borrowers among MSMEs, this matter has already been explained in detail by Yang Berhormat Menteri Kebudayaan, Belia dan Sukan as Chairman of the Board of Directors of Bank Usahawan Berhad during the Oral Question session PL241 on 7 August 2025.

Towards continued efforts to contribute to economic development in line with Wawasan Brunei 2035, Bank Usahawan will remain committed to supporting MSMEs, particularly new businesses and those operated by local youth, in overcoming the challenges faced and ensuring that the services offered, especially in terms of financing facilities, will be more inclusive and accessible.

That is all. Thank you Yang Berhormat Yang Di-Pertua.