The present invention relates to a compiling method and system for generating a sequence of program instructions for use in a processing architecture with architecture resources executing instructions from a corresponding instruction set. A retargetable compiler is used to generate a code using at least two instruction sets in the same processing architecture. One instruction set for a compact code and one for a parallel high performance code. The compact instruction set (Compact Instruction Format) covers a subset (RF1¹, ALU1, L/S1, BU1) of the architecture, whereas the complete instruction set covers the entire architecture (RF1, UC1, UC2, RF2, UC3, UC4, RF3, UC5, UC6, RF4, UC7). By using the at least two instruction sets of different sizes, the compiler is able to reduce the processed average code length, since fewer bits are needed in the compact code to encode operations and registers.