Portugal managed to issue 1.6 billion euros' (2.1 billion U.S. dollars) Treasury bills at sharply lower interest rate on Wednesday, although the country's budget execution deficit rose 191 percent year on year in the first two months of 2012.

For the second time since the country's bailout, Portugal issued one-year Treasury bills totaling 1.6 billion euros at an interest rate of 3.652 percent, the lowest level since November 2010.

In January 2012, the interest rate for 1.25 billion euros' one-year bills was 4.98 percent.

In January and February, the budget execution deficit was 798.6 million euros, with a preoccupying trend of reduction on the corporate income tax by 5 percent, mainly due to the recession.

According to the government, one of the key items in the government spending was a 348.3-million capital investment in the national television and broadcasting corporation to prepare it for privatization.

"The budget execution looks worse than it really is. The government managed to reduce the primary spending by 40 percent in the period," said Miguel Frasquilho, a representative of the ruling party PSD and member of the Budget and Finance Commission in the Parliament. (1 euro = 1.32 U.S. dollars)