AS SINGAPORE continues to tighten the tap on the entry of foreign workers, small and medium-sized companies are facing an increasing shortage of manpower.

This could affect many firms' ability to survive, and ultimately put Singaporeans' jobs at risk, Deputy Prime Minister Teo Chee Hean warned last night as he wrapped up the population debate at a dialogue on the issue.

Indeed, a survey released last month by the Association of Small and Medium Enterprises found that eight in 10 firms were facing manpower shortages, with three in 10 even looking to move overseas in order to survive.

"This is a serious matter because our SMEs employ 70 per cent of our workforce," said DPM Teo, who is in charge of population matters.

"We have to be mindful that many of our SME owners are Singaporeans too. Many of the workers are Singaporeans. If we squeeze too hard, they will lose their jobs too if (the SMEs) move abroad or close down."

Mr Teo was addressing some 220 participants at the last and biggest of a series of dialogues held to discuss the issue.

In an opening speech, he stressed the need for Singapore to raise its birth rate to keep its citizen population stable, and also for new immigrants to help make up the numbers.

But he also spent some time explaining the need for foreign workers, addressing an issue that has raised concerns of overcrowding among many Singaporeans.

While the latest population statistics show a rise in the absolute number of foreign workers, Mr Teo reminded people that the growth of foreign manpower has slowed down. Excluding maids, the growth dropped from 36,800 in the first half of last year to 34,100 in the same period this year. Much of the slowdown came from non-construction sectors.

Of the 34,100 additional workers brought in, construction jobs accounted for 15,500, up from 5,600 last year. Mr Teo said this was part of the "catch-up" Singapore is now playing as it builds public infrastructure to match population growth.

But other sectors saw a drop in growth from 31,200 to 18,600 - a 40 per cent cut. Mr Teo stressed that companies would need time to adjust towards higher productivity.

Mr Teo recounted how SME workers had gone to his Meet the People Sessions pleading for their bosses to be allowed to bring in more foreign manpower. "Why is (the SME worker) interested?" he asked. "Because his job is on the line."

Mr Teo, however, acknowledged concerns that the inflow of new immigrants and foreign workers could cause problems of integration, overcrowding and competition for jobs and space.

He assured participants that, where foreign workers were concerned, the Government had not "gone crazy" and was not "just taking anybody". It would continue to moderate the levels, he said.

And he repeated an earlier assessment that Singapore has enough land to support 6.5 million people. The Government will study if the population can grow beyond this, as planning for a higher number would be "the responsible thing to do", he said.

But he stressed that this was a planning parameter, not a target. Mr Teo said: "It doesn't mean that because you do land planning and infrastructure planning for

a potential population of that size, you are actually going to go for it."

Mr Teo was joined last night by Minister in the Prime Minister's Office Grace Fu, Acting Manpower Minister Tan Chuan-Jin and chief of the Government's feedback unit Amy Khor.

With the official consultation period closing at the end of this month, public feedback will be taken in and included in a White Paper that is due in January and will propose a sustainable population strategy for Singapore.