BALANCE OF PAYMENTS (Q4 2016)

For the fourth quarter of 2016, the overall balance of payments registered a current account surplus of US$18.30 billion, an increase of US$18.53 billion in net assets on the financial account, and an increase of US$0.72 billion in the Bank's reserve assets.

I.    Current Account

The current account posted a smaller surplus in Q4, decreasing by US$1.17 billion or 6.0% over the same quarter of the previous year.

1.  The goods trade surplus narrowed by US$0.24 billion year on year to US$18.04 billion. Growing market demand for semiconductors and a lower base effect have led exports to register a year-on-year increase of US$3.16 billion. In terms of imports, as export-derived demand expanded and international raw material prices rose, imports also increased by US$3.41 billion compared to the same quarter of the previous year.

2.  The services deficit slightly shrank by US$0.01 billion year on year to US$2.12 billion, mainly because of an increase in receipts from manufacturing services.

3.  The primary income account surplus fell by US$0.77 billion over the same period last year to US$3.21 billion, mostly reflecting the increase in payments for nonresidents' portfolio investment income.

4.  The secondary income deficit widened by US$0.16 billion year on year to US$0.82 billion, mainly owing to an increase in workers' outward remittances.

II.  Financial Account

1.  The net assets in direct investment grew by US$0.40 billion. Of the components, residents' direct investment abroad and direct investment by foreign investors registered net increases of US$7.32 billion and US$6.91 billion, respectively, both of which reached the highest quarterly values on record. This was primarily attributable to mergers with and acquisitions of domestic enterprises by foreign investors, as well as large share swap transactions conducted by both sides.

2.  Portfolio investment exhibited a net increase of US$24.35 billion. Of the components, residents' portfolio investment abroad posted a net increase of US$18.23 billion mainly because insurance companies expanded their investment in debt securities abroad. Non-residents' portfolio investment decreased by a net US$6.12 billion as foreign investors trimmed their Taiwanese stock holdings.

3.  Net assets in financial derivatives dropped by US$0.16 billion, principally because of gains on disposal of financial derivatives received by banks and other financial corporations.

4.  Net assets in other investment decreased by US$6.06 billion. The main reason is that the private sector withdrew overseas deposits and banks' borrowings from overseas branches rose.

III. BOP Summary (Q1-Q4, 2016)

For the year of 2016 as a whole, the current account registered a surplus of US$70.94 billion, the financial account showed a net asset increase of US$65.04 billion, and the Bank's reserve assets posted an increase of US$10.66 billion.

Notes:

1. The next balance of payments data will be released at 16:20 p.m. on May 19, 2017.

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.