LISBON, Dec 10 (Reuters) - Portuguese banks' borrowing from the European Central Bank fell almost 3 percent last month following the first bond issues by two of the country's lenders since the advent of the sovereign debt crisis.
Bank of Portugal data showed on Monday the cumulative borrowing, at 54.6 billion euros ($70.6 billion), was still far above year-ago levels of 45.7 billion euros as banks remained largely frozen out of the interbank lending market.
On the last day of October, Banco Espirito Santo -- Portugal's largest listed bank by market capitalisation -- priced 750 million euros in three-year unsecured bonds, marking the return of Portuguese banks to the bond market. It was the first bond issue by a Portuguese bank since March 2010.
BES was followed by state-run Caixa Geral de Depositos that sold 500 million euros in bonds on November 27.
Overall dependency on ECB funds remains high but below June's record of 60.5 billion euros. Top Portuguese banks met the European Banking Authority's new capital requirements in June and are on track with their recapitalisation goals.
However, the country's worst recession in three decades has increased unemployment, bankruptcies and bad loans.
The government plans more austerity measures for 2013 which some economists fear may perpetuate a recessive spiral and hurt the financial sector's activity further.
Last week, Portugal's government was forced to provide state guarantees on European Investment Bank loans given to Portuguese banks, aiming to shore up EIB-backed financing for the recession-hit economy.
Credit ratings of Portuguese banks have fallen below sovereign ratings, making it increasingly difficult for the EIB to accept their own guarantees as collateral.
$1 = 0.7735 euros Reporting By Andrei Khalip. Editing by Jeremy Gaunt.