The actual running joke is that Singaporeans consume water recycled from sewage. That isn't true (well, not completely) but NEWater, which forms a substantial portion of the city-state's drinking water supply, does certainly come from the actual drains.
For a tiny nation like Singapore, which currently depends on neighbouring Malaysia for a good deal of its water supply, water is naturally an extremely valuable resource. That's why this became important to make complete use of waste water gathered via the sewage and drainage program. The water is purified into NEWater through the utilization of dual-membrane and ultraviolet systems, rendering it safe for human being consumption, though most of it really is reserved for industrial use.
If you are keen to learn more, perform drop by the NEWater Visitor Centre, which supplies a platform for visitors to learn about the procedure of making NEWater. The center is all about "edutainment", providing exhibits and activities which are a treat, especially for children.