(Bloomberg) -- The Philippines raised a record 585 billion pesos ($10.5 billion) from the sale of small-denominated treasury bonds, which will help fund government projects and plug a gaping budget shortfall.

Of the total, 212.7 billion pesos were sold during a rate-setting auction earlier this month. During the public offer that ended on Friday, 128.7 billion pesos were raised in fresh funds and 243.5 billion pesos were subscriptions to the new bonds in exchange for notes maturing in March, the Bureau of the Treasury said in a statement on Monday. The debt due February 2029 carries a coupon of 6.25%.

The amount topped the previous record of 516.3 billion pesos from the sale of retail treasury bonds in 2020 for economic and social support during the Covid-19 pandemic.

The Philippines has looked to retail bonds, typically offered in small denominations of 5,000 pesos, to raise a significant portion of its funding requirements. Excluding the latest amount, the government has raised 5.1 trillion pesos from these bonds since their inaugural sale in 2001, representing a third of its outstanding domestic bond issues. 

The latest sale, the fourth retail bond offer under President Ferdinand Marcos Jr., will help fund various government projects including agriculture, infrastructure, education and healthcare, according to the treasury bureau.

For this year, the government plans to borrow 2.46 trillion pesos from domestic and international sources and expects a budget deficit of 1.4 trillion pesos, equivalent to 5.1% of the nation’s economic output. The Marcos administration aims to narrow the deficit to 3% of gross domestic product in 2028, when his term ends.

State-run lenders Development Bank of the Philippines and Land Bank of the Philippines were the joint lead issue managers of the latest deal. BDO Capital & Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, First Metro Investment Corporation, PNB Capital and Investment Corporation and Union Bank of the Philippines were the joint issue managers.

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