Bond Product
Performance Bond in the Philippines
Performance security guaranteeing faithful performance of a contract after award.
Overview
A performance bond, or performance security, is posted after award. It answers to the obligee for losses if the contractor fails to perform the contract in accordance with its terms.
Performance security is commonly set at a percentage of the total contract price, with surety bonds typically accepted at a higher percentage than cash or bank guarantees. The contract and the obligee's requirement govern.
Purpose
- Secures completion of the works, goods, or services under the awarded contract.
- Gives the obligee recourse for cost overruns caused by contractor default.
- Allows the contractor to keep credit lines free for project execution.
Who needs this bond
- Contractors awarded government or private construction contracts
- Suppliers under long-term delivery or framework agreements
- Service providers under maintenance or operations contracts
- Subcontractors required to post security to a main contractor
Typical requirements
- Accomplished bond application with obligee and contract details
- SEC or DTI registration, Articles of Incorporation or business permit
- BIR Certificate of Registration and latest tax return
- Audited financial statements for the last two to three years
- Valid government IDs of signatories and board or partnership authority
- Copy of the obligee's bond requirement, invitation to bid, or contract
- Notice of Award or signed contract
- Project schedule or scope of work
Final requirements depend on the obligee and the issuing insurance company. See the full requirements guide.
Bond request and insurer process
Step 1
Submit a bond request
Open a bond request in your SuretyPH portal and enter the obligee, contract, and bond details.
Step 2
Upload requirements
Follow the guided checklist and upload each document securely to your transaction file.
Step 3
Pre-assessment
We review the file for completeness and refer it to a participating licensed insurance company.
Step 4
Insurer evaluation and quotation
The insurer evaluates the submission and provides a quotation covering premium, fees, and any collateral requirement.
Step 5
Payment and issuance
Once the quotation is accepted and the premium settled, the insurer issues the bond for release or delivery.
Frequently asked questions
When must the performance bond be posted?
Usually within the period stated in the Notice of Award, before contract signing or issuance of the notice to proceed.
Will collateral be required?
Some submissions are approved on financial strength alone; others require collateral or an indemnity arrangement. Only the issuing insurance company can decide.
Can the bond be extended?
Yes. Extensions for time-extended contracts are processed as endorsements, subject to insurer approval and additional premium.
Related bonds and guides
Many projects require more than one security. Compare a bid bond in the Philippines, a warranty bond in the Philippines and a advance payment bond in the Philippines, or browse every Philippine surety bond type to confirm which security your obligee requires.
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.