Contract Bonds
Bid Bond
Bid security supporting a proposal submitted to a Philippine government agency or private project owner.
Overview
A bid bond, also called bid security, assures the obligee that a winning bidder will enter into the contract and post the required performance security.
Under Philippine government procurement practice, bid security is set as a percentage of the approved budget for the contract, with surety bonds commonly accepted at a higher percentage than cash. The bidding documents always govern the form and amount.
Purpose
- Protects the obligee if a winning bidder withdraws or refuses to sign the contract.
- Screens out non-serious bidders and supports orderly award.
- Preserves working capital compared with posting cash or a manager's check.
Typical uses
- Public infrastructure and building bids
- Goods, equipment, and materials procurement
- Consultancy and professional service bids
Who normally requires it
- Contractors bidding on infrastructure and building works
- Suppliers bidding on goods and equipment
- Joint ventures submitting a consolidated bid
Parties involved
- Principal — the contractor or supplier applying for the bond
- Obligee — the project owner or procuring entity protected by the bond
- Surety — the authorized Philippine insurance company that issues the bond
Typical documentary requirements
- Accomplished bond application form with obligee and transaction details
- SEC or DTI registration, Articles of Incorporation, or business permit
- BIR Certificate of Registration and latest filed tax return
- Audited financial statements for the last two to three years
- Valid government IDs of signatories and board or partnership authority
- Invitation to bid or bidding documents
- PCAB license for construction bids, where applicable
Final requirements depend on the obligee and the issuing insurance company. See the full requirements guide.
Typical application process
Step 1
Submit the application
Open an application in your SuretyPH portal and enter the obligee, transaction, and bond details.
Step 2
Upload requirements
Follow the guided checklist and upload each document securely to your application file.
Step 3
Pre-assessment
We review the file for completeness and endorse it to an authorized issuing insurance company.
Step 4
Quotation
The insurer evaluates the submission and issues a quotation covering premium, fees, and any collateral requirement.
Step 5
Payment and issuance
Once the quotation is accepted and the premium is settled, the insurer issues the bond for release or delivery.
Risks typically covered
- Withdrawal of a bid before expiry of bid validity
- Refusal to execute the contract after award
- Failure to post the required performance security
Frequently asked questions
How long is a bid bond valid?
Validity follows the bid validity period in the bidding documents, commonly 120 days from bid opening, and may need extension if award is delayed.
Is the premium refundable if we lose?
Premiums are generally earned once the bond is issued. Refund or cancellation treatment is determined by the issuing insurance company.
Can a bid bond be issued the same day?
Turnaround depends on document completeness and insurer evaluation. No timeline is guaranteed.
More answers on premiums, collateral, and timelines are in the general FAQs.
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SuretyPH is a digital information and lead-generation platform owned and operated by McMatthise Global Group Corporation. It does not independently underwrite, approve, bind, issue, or guarantee any insurance policy or surety bond. Evaluation, underwriting, premiums, approval, and issuance remain the responsibility of the relevant duly licensed insurance company.