FILP REPORT 2002

II FILP FAQ
Q	[1]What is the FILP Plan?

A FILP is subject to approval by the Diet along with the General Account budget, as they have resource-allocation functions and have much to do with the interest of the nation as a whole. Specifically, they are deliberated according to funding sources - Fiscal Loan, Industrial Investment, and Government Guarantee - and passed in the form of general provisions concerning the Budget of Special Account, Industrial Investment Special Account Budget, and general provisions concerning the Budget of General Account.

"The Fiscal Investment and Loan Program" refers to the FILP-agency-by-FILP-agency list of planned amount of funding by Fiscal Loan, Industrial Investment, and Government Guarantee. Every fiscal year, the Financial Bureau of the Ministry of Finance coordinate how much financing is used for which projects after investigating all the projects of each FILP agency. Through these adjustments, the FILP Plan is compiled in conformity with the compilation of General Account budget and submitted to the Diet based on the related laws.
In compiling the FILP Plan, the Financial Bureau carries out thorough review of each financing in order to meet people's needs and changes in social and economic conditions.

Chiba New Town, Kusafuka Garden (Chiba)

Q	[2]Please explain the FY2002 FILP Plan.

A Japan is now promoting structural reform in order to establish a new socioeconomic system. From the standpoint of separating the roles of the public sector and the private sector, the FILP has focused on the areas and projects that cannot be done by the private sector.
The total FY2002 FILP plan amounts to ¥27 trillion, a decline of 17.7% from the initial FILP plan for FY2001. The decrease can be attributed to the fact that planned lending by the Housing Loan Corporation has been slashed sharply in the light of reform of public corporations and in order to better coordinate with private-sector home lending.
Nevertheless, the FY2002 FILP has secured the funds necessary for implementing policy measures. Therefore, it will contribute to structural reforms and economic recovery.
Specifically, the FILP has secured the funds necessary for establishing welfare/medical care facilities, such as special nursing-care homes for the aged, and for expanding interest-bearing scholarship programs and types of students eligible for lending, in order to expand educational platforms. It has also secured funds to support private enterprises engaged in the high-risk development of strategic software for the next generation.
In the light of current economic conditions, the FILP also endeavors to deal appropriately with true funding requirements. For example, the National Life Finance Corporation and the Japan Finance Corporation for Small Business have earmarked more funds than in the previous year for "safety net" lending and the Development Bank of Japan has secured a credit line to promote investment in Corporate Rehabilitation Funds and support for SMEs through DIP financing. With regard to the promotion of urban renewal, the Urban Development Corporation and the Housing Loan Corporation have secured more funds than they actually spent in FY2001.
FILP bond issuance planned for FY2002 comes to ¥34.4 trillion. This represents a decrease of ¥9.5 trillion from the previous fiscal year, reflecting the fact that the size of the FILP has been reduced.
As to FILP agency bonds, 24 agencies (20 agencies in FY2001) plan to issue a total of ¥2.7 trillion in FY2002, a great increase compared to FY2001 (about ¥1.1 trillion).


Note:	Postal Savings funds and Postal Life Insurance reserves make, as exceptions to discretionary investment on the financial market, direct loans to local government, within the ceiling specified by the Local Loan Program and the FILP Plan.