Law Summary
Acceptance of Bonds as Security
- Bonds accepted at par value by all Commonwealth officers
- Can be used instead of bonds or other securities for public contracts and obligations
- Applicable where law requires bonds, undertakings, or cash deposits for due performance
- Can also secure payment of customs dues, taxes, licenses, fees imposed by law
Non-acceptance as Cash for Public Obligations
- Bonds cannot be accepted as cash for payment of public obligations
- Bonds accepted only as security where law requires bond or security
Procedure for Depositing Bonds
- Deposits made with Treasurer of the Philippines in Manila or nearest provincial treasurer elsewhere
- Treasurer issues a certificate indicating deposit details and specified purpose
- Deposit slips must show number, kind, par value, and intended use of the deposit
Certificate of Deposit and Its Use
- Treasurer issues special certificate showing amount and deposit purpose
- Certificate accepted by designated bureaus, offices, courts, or local governments as security
- Certificate functions equivalently to private or surety bonds or cash deposits
Handling of Interest Coupons
- Coupons maturing while bonds are deposited may be collected by bondholder
- Collection subject to regulations by the Treasurer of the Philippines
Limitations on Use of Bonds as Security
- Bonds not accepted where security must permanently remain with Commonwealth (e.g., to secure duplicate warrants)
- Bonds accepted only where they may be returned upon fulfillment of principal obligation
- Upon default, bonds become Commonwealth property akin to other defaulted securities
Return of Bonds After Compliance
- Procedures for returning bonds to depositors set forth on the certificate of deposit
- Return occurs after full compliance with the underlying terms of deposit
Legal and Administrative Effect
- Bonds provide convenience for holders and officials managing public securities
- Clarifies conditions and administration of bonds as security for public undertakings
- Ensures lawful, regulated acceptance and return of bonds used in public transactions