Chapter 10 — Mistakes, Risks & Practical Tips
Why Bond Amount and Validity Must Match the Requirement
The bond amount and the validity or duration come from the requirement, not from habit or a previous project. Both should be checked against the actual document before the bond is prepared.
Direct answer
Read the requirement and take the amount — or the basis for computing it — and the validity from it. A bond in the wrong amount, or running for the wrong period, may not meet what the Obligee asked for.
Amount
The requirement may state a figure, or a basis such as a proportion of a stated value. Confirm which, and confirm the value it is applied to, since contract values change through variations and amendments. Where the basis is unclear, ask the Obligee in writing rather than inferring it.
Validity or duration
Validity is usually tied to something in the underlying transaction — a submission period, a milestone, a completion date or a post-completion period. Check the start date as well as the length, and check how extensions are dealt with if the underlying timetable moves.
No figures are published here
This page states no percentage, minimum amount or validity period, because those come from the requirement in your own transaction and vary between them.
For procurement-related bonds
Confirm the requirement from the applicable bidding documents, the contract or security requirement stated there, and the current governing procurement rules — Republic Act No. 12009 and its applicable IRR with current GPPB issuances. Keep in mind that Bid Security is the requirement and a bid bond may be one permitted form of it, and that Performance Security likewise is not the same thing as a performance bond. See How Do You Read Bond Requirements in Bidding Documents?.
Do not carry figures across projects
A previous project''s amount and validity say nothing about the next one. The Obligee, the contract and the obligation may all be different. See Can Bond Terms and Requirements Change From One Project to Another?.
Key considerations
Evaluation, underwriting, documentary requirements, terms, premium, approval and issuance remain functions of the applicable insurer or Surety. The Obligee determines and communicates its applicable bond requirement, subject to governing law and rules where applicable. SuretyPH provides information, accepts inquiries, supports document submission, facilitates applications and communicates status; it does not determine procurement compliance, acceptance by the Obligee or issuance.
Key takeaway
Take the amount, or its basis, and the validity from the actual requirement — including the start date and how extensions are handled — and never carry figures over from a previous project.
Related topics
Relevant bond information
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Important Notice
Inquiries and supporting documents submitted through SuretyPH may be referred to the applicable participating insurer for evaluation. Submission does not constitute approval or issuance of a surety bond. Applications are subject to the insurer's requirements, evaluation, underwriting, terms, conditions, and approval.
SuretyPH is a digital platform for surety bond information, inquiries, requirements and request tracking. It does not underwrite, approve, bind, issue, or guarantee any insurance policy or surety bond. Evaluation, underwriting, approval, pricing and issuance are undertaken by the applicable licensed insurance company.