BALANCE OF PAYMENTS (Q1 2016)

In order to maintain consistency with international statistical standards and practice, the Bank has adopted the sixth edition of the IMF's Balance of Payments and International Investment Position Manual (BPM6) since its first quarter of 2016 BOP release. The time series data from 1984 have been converted to conform with BPM6. However, data on the components with new definitions are available from the first quarter of 2012 because of source constraints. Major changes and comparison of the changeover are provided in Appendix.

For the first quarter of 2016, the overall balance of payments registered a current account surplus of US$20.72 billion, an increase of US$18.92 billion in net assets on the financial account, and an increase of US$3.85 billion in the Bank's reserve assets.

In the current account, exports contracted by 13.0% year on year, dampened by sluggish global economic growth, a continued slump in international oil prices, and the impact of China's import substitution policy. Imports also decreased by 14.7% year on year, as soft export-derived demand led to a decline in imports of agricultural and industrial raw materials. With a larger decrease in exports over that in imports, the goods trade surplus amounted to US$17.48 billion, shrinking by US$1.39 billion from the same period of the previous year.

The services account deficit narrowed by US$0.29 billion year on year to US$1.92 billion, mainly because of a decrease in payments for manufacturing services and an increase in travel receipts. The primary income account ran a surplus of US$5.69 billion, with a US$0.15 billion increase mainly owing to an increase in receipts on portfolio investment abroad and a reduction in payments for nonresidents' direct investment income. On the secondary income account, a decrease in outward remittances to support family and relatives overseas led the deficit to narrow by US$0.19 billion to US$0.54 billion.

Overall on the current account, smaller deficits on the services and secondary income accounts and a wider primary income surplus were more than offset by the contraction in the goods trade surplus. For the first quarter of 2016, the current account recorded a narrower surplus with a year-on-year decrease of US$0.76 billion, or 3.5%.

In the financial account, direct investment and portfolio investment net assets recorded increases of US$2.54 billion and US$17.17 billion, respectively. Residents' portfolio investment abroad exhibited a net increase of US$21.18 billion, mainly resulting from expanded investment in foreign debt securities by insurance companies. Nonresidents' portfolio investment recorded a net increase of US$4.01 billion as foreign investors boosted their stock holdings. Net assets in financial derivatives posted a decrease of US$1.27 billion, while net assets in other investment showed an increase of US$0.47 billion as banks' deposits with overseas branches rose.

Notes:

1. The next balance of payments data will be released at 16:20 p.m. on August 19, 2016.

2. For the release schedule for the next six months, please check the CBC website at http://www.cbc.gov.tw/ct.asp?xItem=30164&ctNode=515&mp=2.