QuestionsQuestions (OP ADMINISTRATIVE ORDER NO. 377)
The basis is Act No. 536, as amended by Act No. 2206.
It is sufficient when the instrument is required or permitted by Philippine law or by regulations/resolutions of a public authority to be given with one surety or two or more sureties, and the corporation alone guarantees solely the performance of the condition.
Obligations conditioned for the faithful performance of any duty or any contract made with any public authority (national, provincial, municipal, or otherwise), or for doing or refraining from doing anything, including undertakings in judicial proceedings.
No head of department, judge, officer, board, or body may approve or accept the corporation as surety unless it has been authorized to do business in the Philippines under Act No. 536 (as amended) and has, by contract with the Government of the Philippines, been authorized to become a surety on such instruments.
That it is a domestic corporation organized under Philippine law and fulfills the conditions prescribed by Act No. 536 (as amended).
It authorizes the corporation to act as surety upon official recognizances, stipulations, bonds, and undertakings, subject to the legal conditions stated in the order and applicable law.
The amount constituting the contributed surplus fund shall not at any time be withdrawn without prior recommendation and justification by the Insurance Commissioner, duly approved by the Secretary of Finance.
The moment the corporation becomes indebted to any government instrumentality or political subdivision, or to any government-owned or controlled corporation, in the total amount of P50,000.00 accruing from the issuance of bonds, which has become due and demandable.
It must voluntarily desist from writing or issuing all kinds of bonds until the outstanding liabilities in government bonds have been fully paid or settled.
Non-payment is a cause for immediate revocation of this Administrative Order.
Withdrawal is allowed only if there is prior recommendation and justification by the Insurance Commissioner and approval by the Secretary of Finance.
Because Act No. 536 (as amended) requires such authorization by contract; it ensures that the Government has formally consented and set the terms under which the corporation may become a surety.
03 February 1998.
P50,000.00, representing the total amount of indebtedness accruing from the issuance of bonds to government instrumentality or political subdivision (or GOCC), which becomes due and demandable.