BALANCE OF PAYMENTS (Q2 2016)

For the second quarter of 2016, the balance of payments registered a current account surplus of US$17.13 billion, an increase of US$15.40 billion in net assets in the financial account, and an increase of US$3.15 billion in the Bank's reserve assets.

I.    Current Account

The current account surplus grew by US$1.36 billion or 8.6% over the same quarter of the previous year.

1.  The goods trade surplus narrowed to US$17.01 billion, a year-on-year decrease of US$0.20 billion. Exports declined by US$8.62 billion year on year, reflecting weak global demand and the impact from China's overcapacity issue and its strategy of import substitution. Meanwhile, soft export-derived demand led to a decrease in imports by US$8.42 billion over the same quarter of the previous year.

2.  The services deficit shrank by US$0.10 billion year on year to US$2.71 billion, mainly because of decreases in charges for manufacturing services and for the use of intellectual property.

3.  The primary income account surplus rose to US$3.70 billion, a year-on-year increase of US$1.13 billion, mainly due to increases in income from direct investment abroad and from investments in foreign exchange assets.

4.  The secondary income deficit narrowed by US$0.32 billion year on year to US$0.87 billion, mainly owing to a decrease in outward remittances to support family and relatives overseas.

II.    Financial Account

1.  The net assets in direct investment increased by US$2.39 billion. Direct investment abroad by residents and direct investment by foreign investors registered net increases of US$2.89 billion and US$0.50 billion, respectively.

2.  Portfolio investment exhibited a US$15.21 billion increase in net assets. Residents' portfolio investment abroad exhibited a net increase of US$17.09 billion mainly owing to greater investment in debt securities abroad by insurance companies. Non-residents' portfolio investment posted a net increase of US$1.88 billion mainly as a result of increased foreign investment in the Taiwanese stock markets.

3.  Net assets in financial derivatives decreased by US$0.69 billion, mainly because of gains on disposal of financial derivatives received by non-bank financial corporations. 

4.  Net assets in other investment decreased by US$1.50 billion. This is mainly because non-resident deposits and short-term external borrowing by banks both expanded, leading to a larger increase in foreign liabilities.

III.    Balance of Payments Summary (Q1-Q2, 2016)

For the first two quarters of 2016, the current account registered a surplus of US$37.17 billion, the financial account showed a net asset increase of US$32.79 billion, and the Bank's reserve assets posted an increase of US$7.00 billion.

Notes:

1. The next balance of payments data will be released at 16:20 p.m. on November 21, 2016.

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