Authorization of Corporate Guarantee and Insurance Co. as Surety

Act No. 536, as amended by Act No. 2206, authorizes execution of certain official recognizances, stipulations, bonds, and undertakings by a corporation organized under Philippine laws if it has the required powers.
The governing statute limits approval by officials: no head of department, judge, officer, board, or body shall approve or accept a corporation as surety unless the corporation is authorized to do business in the Philippines.
The statute further requires an additional governmental authorization mechanism: the corporation must have a contract with the Government of the Philippines authorizing it to become a surety on official recognizances, stipulations, bonds, and undertakings.
The order states that Corporate Guarantee & Insurance Company, Inc. fulfills the statutory conditions under Act No. 536, as amended.

The President authorizes the Corporate Guarantee & Insurance Company, Inc. to become a surety upon official recognizances, stipulations, bonds, and undertakings.
The authorization operates in such manner and under such conditions as are provided by law.
The authorization is subject to express conditions stated in the order, including safeguards tied to contributed surplus and government-indebtedness.
The authorization is framed around the statutory framework that allows corporations to guarantee specified faithful performance obligations in judicial and public-authority contexts.

The authorized surety corporation is Corporate Guarantee & Insurance Company, Inc.
The corporation is a domestic corporation organized and existing under the laws of the Republic of the Philippines.
The order ties authorization to the corporation’s statutory capacity to guarantee the fidelity of persons holding positions of public or private trust.
The order ties authorization to the corporation’s capacity to execute and guarantee bonds in judicial proceedings and to agree to faithful performance of contracts or undertakings with public authorities.

Withdrawal of contributed surplus is restricted: the contributed surplus fund shall not at any time be withdrawn without prior recommendation and justification by the Insurance Commissioner, and approval by the Secretary of Finance.
The order imposes a compliance trigger tied to government-indebtedness:
- When the corporation becomes indebted to any government instrumentality or political subdivision or to any government-owned or controlled corporation.
- The triggered total amount is P 50,000.00.
- The indebtedness must be accruing from the issuance of bonds and have become due and demandable.
Upon occurrence of the trigger, the corporation must voluntarily desist from writing or issuing all kinds of bonds.
The desistment continues until outstanding liabilities in government bonds have been fully paid or settled.

Non-payment of liabilities is declared to be a cause for immediate revocation of OP Administrative Order No. 377.
The revocation consequence is tied specifically to failure to satisfy the corporation’s bond-related liabilities to government-linked entities under the order’s described trigger.

The order is adopted on February 03, 1998.
It is signed for the President by Alexander P. Aguirre, Acting Executive Secretary, with signature indicated as SGD.