10.1 Public Bonding Law, Fidelity Schedules, and Accountable Officer Coverage

Public Bonding Law, Fidelity Schedules, and Accountable Officer Coverage

Use the current circular

Bureau of the Treasury Treasury Circular No. 1-2026 is the current comprehensive fidelity-bonding issuance. It repealed Treasury Circular No. 02-2009 and the intervening circulars listed in its repealing clause. Old study material that states a fixed one-year bond, a thirty-day renewal window, or the old coverage schedule must therefore be checked against the 2026 circular.

Fidelity bonding protects government against loss caused by the covered accountable public officer's fraud or dishonesty, within the bond's terms and amount. It does not transfer ownership of funds to the Fidelity Fund, excuse weak controls, or automatically settle every audit shortage.

Coverage and exclusions

The circular covers accountable public officers of national government agencies, local government units, and covered government corporations who have money or property accountability of at least ₱5,001. Determine actual accountability from the cash, collections, property, accountable forms, or other public assets entrusted to the officer—not merely from job title.

The circular also states exclusions, including persons not subject to civil-service laws and rules and persons outside the covered appointment or designation framework identified in the 2025 ORAOHRA. A casual label such as “collector” does not override the legal status and coverage rules. The agency must verify whether the individual may lawfully be designated, whether the functions create accountability, and whether the person falls within the circular.

Bond amount and premium

The agency assesses the officer's accountability and applies the current schedule. Treasury Circular No. 1-2026 sets a maximum bond of ₱11,000,000 for each accountable public officer at each station. The annual premium is 1.5% of the bond, subject to a minimum premium of ₱150. If a two- or three-year period is chosen, compute and pay the premium according to the selected coverage period and the circular.

A bond amount should track the authorized accountability, within the ceiling. Changes in duty station, designation, accountability, separation, or other material circumstances require the agency to update, cancel, transfer, or obtain coverage as the rules require. An expired or mismatched bond cannot be treated as valid merely because an old certificate remains in the personnel file.

Application and renewal

The Online Fidelity Bonding System (OFBS) is the primary application platform. The appointing agency and accountable officer must submit truthful, complete supporting information and obtain approval before the officer handles covered accountability. The available validity periods are one, two, or three years.

Renewal may be filed within sixty days before expiration. The responsible office should maintain a bond register showing the officer, position or designation, station, accountability, bond amount, certificate number, effective and expiration dates, and renewal status. Calendar alerts help prevent a lapse, but review is still needed when accountability changes before ordinary renewal.

Bond is not a defense to responsibility

A fidelity bond is risk protection for government. It is not a license to disregard segregation of duties, daily deposit, cash count, reconciliation, or supervisory controls. Payment from the Fidelity Fund does not necessarily erase the responsible person's obligation or prevent administrative, civil, or criminal proceedings. Conversely, the existence of a shortage does not establish every supervisor's personal liability without the findings required by the governing law.

For examination questions, identify the current issuance, coverage threshold, amount, premium, platform, validity option, renewal window, and the distinction between security and legal responsibility.

Current figures at a glance

Applying the 2026 bond schedule

Under Bureau of the Treasury Circular No. 1-2026, first determine the officer's estimated maximum cash accountability at the station and locate the corresponding scheduled bond amount. The bond is not automatically equal to every peso of accountability. Multiply the scheduled bond amount by the annual premium rate of 1.5 percent, subject to the minimum premium of PHP 150. For example, the circular's schedule places a PHP 750,000 cash accountability in the bracket with a PHP 350,250 bond; the annual premium is therefore PHP 5,253.75. Show the bracket selection before the multiplication so the computation can be reviewed.

The circular permits one-, two-, or three-year validity choices and requires renewal within the sixty-day period before expiry. A longer validity choice does not remove the duty to report material changes in accountability, station, position, or custodial assignment. The maximum bond is PHP 11 million for each accountable public officer at each station. Confirm the current electronic application and payment instructions rather than copying a superseded procedure from an older circular.

Bonding is risk transfer, not permission to weaken controls. The appointment or designation, actual custody, bond record, accountability amount, and system access should agree. Unbonded handling, an expired bond, or accountability beyond the supported bracket requires prompt corrective action. A bond also does not erase personal, administrative, civil, or criminal responsibility for an unlawful or negligent act.