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ECONOMY > Economic Policy

MOF to ramp up FILP by 3.3 trillion yen

  • August 20, 2016
  • , Nikkei , p. 4
  • Translation

The Ministry of Finance will ramp up its fiscal investment and loan program (FILP) for fiscal 2016 by roughly another 3.3 trillion yen. The increase will be allocated to finance moving forward the completion of a project to extend the maglev rail line to Osaka and acceleration of construction of shinkansen bullet train services and other projects included in economic stimulus that the government compiled this month. The change will be submitted to an extraordinary Diet session, which will be convened in September.

 

MOF initially sought an allocation of 13.5 trillion yen from the FILP, but will raise it to about 16.8 trillion yen to better accommodate the economic package. The last time the FILP topped 16 trillion yen was two years ago.

 

Of the increased amount, 1.5 trillion yen will be allocated to advance a project to extend the maglev railway line. The funds will  also be used to finance the promotion of universal design and barrier-free stations and to help smaller firms, as well as finance construction of shinkansen railways in Hokkaido and the Hokuriku region. The government plans to earmark an additional 1.5 trillion yen for the maglev project in fiscal 2017 as well.

 

The government will issue “zaito bonds,” a government bond variety exclusively used to finance the FILP, to secure the increased amount of money. Funds procured via the issuance of zaito bonds will be channeled into the private sector via state-affiliated financial institutions. MOF will make use of the current ultra-low interest rate policy to cut the minimum rate that it charges when lending money to state-affiliated banks to 0.01% from the present 0.1%. (Abridged)

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