The Finance Ministry proposed Saturday a 12.5 percent cut in spending under the Fiscal Investment and Loan Program for fiscal 2004, which would be the fifth consecutive year-on-year reduction.

Spending under FILP, also known as "zaito," will be 20.489 trillion yen, down from 23.412 trillion yen in the initial plan for fiscal 2003.

The scale of spending under the program will be the lowest since fiscal 1983 and close to half of the peak of 40.534 trillion yen in fiscal 1996.