FILP REPORT 2006

The Fiscal Investment and Loan Program (FILP) is investment and loan activity to enable the implementation of large-scale and extremely long-term projects that would be difficult for the private sector and the supply of long-term funding that would be difficult for the private financial institutions using funds raised from the financial markets through the issuance of government bonds (FILP bonds) as the funding source. In short, the FILP can be a means for the implementation of fiscal policies using financial techniques.
This Report has been prepared to answer the many questions that we received concerning the FILP. We have made every attempt to explain the mechanism and the utilization fields of the FILP. It also explains the FILP by using the most up-to-date information possible in an easily understood manner.
The Financial Bureau looks forward to your comments and we will continue to enhance and improve this booklet so that readers may have a better understanding of the FILP.

Financial Bureau
Ministry of Finance

September 2006

Tokyo International Airport (Haneda)
Offshore Expansion Project
(Special Account for Airport Development)
Tokyo International Airport (Ota-ku Tokyo)

Outline of Fiscal Investment and Loan Program (FILP)

1. FILP as a Fiscal Policy
2. How the FILP Works
(1)	Mechanism of the FILP
(2)	Projects utilizing the FILP
3. The FILP Reform and Its Progress
(1)	Reform of the fund procurement mechanism
(2)	Project review and quantitative reduction
(3)	Qualitative reforms (promotion of disclosures, development of market assessment)
4. Follow-up to the Comprehensive Review of the FILP Reform
5. Future FILP

FILP FAQ

(1)	Is the FILP approved by the Diet?
(2)	Please explain the FY2006 FILP Plan?
(3)	What are FILP agencies?
(4)	How do FILP agencies raise funds?
(5)	How do FILP bonds differ from government bonds?
(6)	Will there be no problem with the absorption of FILP bonds after the termination of the transitional measure for direct acceptance of FILP bonds?
(7)	Isn't advance redemption of Fiscal Loan Fund possible?
(8)	Is it true that many FILP projects are generating nonperforming loans?

III

APPENDIX

Relevant laws (Excerpts)
Statement of Cabinet Decisions (Excerpts)
Fiscal Investment and Loan Program
Fiscal Loan Fund Special Account and Fiscal Loan Fund
Summary of the Fiscal Loan Fund Management Report for FY2005
Industrial Investment Special Account(Industrial Investment Account)
FY2006 Policy (Subsidy) Cost Analysis
Information Directory

Photographs courtesy of:
Special Accounts for Petroleum and the More Sophisticated Structure of Demand and Supply of Energy Policies;
Special Account for National Centers for Advanced and Specialized Medical Care;
Special Account for Airport Development ; Japan Finance Corporation for Municipal Enterprises;
Development Bank of Japan; Japan Bank for International Cooperation;
Urban Renaissance Agency (Independent Administrative Institution);
Japan Water Agency (Independent Administrative Institution);
Welfare And Medical Service Agency (Independent Administrative Institution);
The Promotion and Mutual Aid Corporation for Private Schools of Japan;
Japan Green Resources Agency (Independent Administrative Institution);
Organization for Small & Medium Enterprises and Regional Innovation, JAPAN (Independent Administrative Institution);
Hanshin Expressway Company Limited