The Finance Ministry on Tuesday proposed a 12.5 percent cut in the government's fiscal investment and loan program in fiscal 2006 to a 27-year low.

The move mirrors the program's diminishing project-financing role amid a shakeup of government-affiliated agencies.

The proposed outlays under the FILP, or "zaito" program, for fiscal 2006 will total 15.005 trillion yen, down from 17.152 trillion yen under the initial fiscal 2005 plan.