The example above relates to the provision of a service. The person providing the service didn't have a paper trail to acknowledge that the service was rendered and completed. In the even of a dispute, Paypal needs documentary evidence.
In another context, I sold some photographic items on eBay last year. And I have to say that the few local Singaporean eBay buyers I have encountered have been a nightmare. Two jerks refused to pay after submitting winning the bids. Didn't bother to respond to repeated emails. One did not wish to pay for the shipping cost stated in the listing, while another tried to initiate an "item not received" complaint with Paypal after receiving the item. Fortunately I had documentary evidence to prove that the item was shipped out and buyer acknowledged receipt.
So my tip to those who want to sell to local Singaporean eBayers are as follows:
1) Make sure they pay within the time period. If not, to initiate a deadbeat buyer report.
2) Never agree to self collection. Person can later claim they didn't receive item as the onus is on the seller to prove item was shipped out. Paypal can work against you as in their eyes you could be a deadbeat seller.