Infrastructure
Government Infrastructure Contractors
Bid security, performance security, and warranty security for contractors bidding on Philippine public infrastructure.
Industry overview
Government infrastructure contractors undertake roads, bridges, flood control, water systems, school buildings, ports, and similar public works procured under the government procurement rules.
Public procurement requires bid security with every bid, performance security before contract signing, and warranty security covering the structural defects liability period. Where a mobilisation advance is released, an advance payment security of equal value is normally required and is recouped from progress billings.
Bond forms, amounts, and validity periods are dictated by the bidding documents of the procuring entity, so the exact wording required should always be submitted with the application.
Typical surety bonds
Typical documentary requirements
- Accomplished bond application with obligee and contract details
- SEC or DTI registration, Articles of Incorporation, and business permit
- BIR Certificate of Registration and latest income tax return with filing proof
- Audited financial statements for the last two to three years
- Valid government IDs of signatories plus board or partnership authority
- Copy of the obligee's exact bond requirement or prescribed wording
- PCAB licence and registration with the procuring entity
- Invitation to Bid or bidding documents with the security clause
- Notice of Award or Notice to Proceed
- Statement of ongoing and completed government contracts
Documentary requirements vary depending on the issuing insurance company and the specific transaction. The list above reflects what is commonly requested, not a fixed rule.
Typical application process
- 1Application
- 2Document submission
- 3Review
- 4Insurer evaluation
- 5Quotation
- 6Payment
- 7Bond issuance
Frequently asked questions
What is the usual form of bid security in public bidding?
Bidding documents typically allow cash, manager's cheque, bank guarantee, or a surety bond callable on demand, with the surety option set at a higher percentage of the approved budget. The bidding documents govern.
When must performance security be posted?
Normally within the period stated in the Notice of Award and before contract signing. Late posting can affect the award, so applications are best started as soon as the notice is received.
Is warranty security separate from performance security?
Yes. Performance security covers execution of the works; warranty security replaces it after final acceptance and covers the defects liability period stated in the contract.
Can the bond be extended if the contract time is extended?
Extensions are processed as endorsements to the existing bond, subject to insurer approval and additional premium.
What if the agency requires its own bond form?
Provide the agency's exact form or wording with the application. Insurers review non-standard wording before agreeing to issue.
Questions we frequently receive from Government Infrastructure Contractors
Do all procuring entities require the same documents?
No. Requirements differ across agencies and are further shaped by the issuing insurance company. Submit the specific agency requirement with your application so the file is prepared correctly.
Can a newly established company obtain a surety bond?
Applications from newly registered companies are accepted for evaluation. Underwriters usually look at opening financial statements, capitalisation, the experience of the principals, and the nature of the obligation. Some insurers ask for collateral or indemnity support where trading history is short. Approval rests with the issuing insurance company.
Can several projects or transactions be covered at the same time?
Companies with recurring requirements often ask for a surety line so individual bonds are issued against an approved aggregate limit. Whether a line is granted, and its size, is determined by the insurer after reviewing financial capacity and existing exposure.
Do banks require the same documents as surety companies?
There is overlap - registration papers, financial statements, and tax filings - but the assessment differs. Banks focus on cash cover and credit facilities, while surety underwriters look at the obligation, experience, and capacity to perform. Document lists vary per institution.
Can financial statements from the previous year be used?
Insurers generally require the latest audited financial statements. Where a new audit is not yet available, some accept the prior year's audited statements together with recent interim statements. Acceptance varies among insurers.
How can approval chances be improved?
Submit a complete file at first endorsement, keep audited statements current, disclose existing bond exposure, and provide the obligee's exact bond wording. Complete and consistent documents reduce clarifications, but they do not guarantee approval.
Can an application be expedited?
Urgent submissions are commonly accommodated, and complete files move fastest. Actual turnaround still depends on the insurer's evaluation and any additional requirements raised, so no processing time is guaranteed.
Can collateral sometimes be waived?
Collateral practice varies by insurer, bond type, amount, and the applicant's financial standing. Some submissions are approved on financial strength alone; others require collateral or an indemnity agreement. Only the issuing insurance company can decide.
Related knowledge articles
Warranty Bonds
Post-completion warranty security: what it covers, how long it runs, and how it is computed.
Performance Bonds
Performance security for awarded contracts, typical percentages, and how the bond is released.
Bid Bonds
How bid security works in Philippine government procurement and what a surety bid bond must contain.
Related bond products
Bid Bond
Bid security for government and private tenders.
Performance Bond
Performance security posted after award.
Advance Payment Bond
Security for mobilisation or advance payments.
Warranty Bond
Covers defects during the warranty period.
Customs Bond
Bureau of Customs undertakings for importers and brokers.
Judicial Bond
Court bonds used in litigation and appeals.
Other industries in this category
Start your application
Send us the obligee's bond requirement and we will advise the documents needed for your transaction.
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.