Document background
The Advance Performance Guarantee is a critical document in Philippine commercial transactions, particularly in large-scale projects where substantial advance payments are involved. This guarantee instrument, governed by Philippine banking regulations and the Civil Code, provides financial security to project owners or employers who make advance payments to contractors or service providers. The document is typically required before the release of advance payments and remains active until the advanced amount is fully amortized or the contracted works are completed. The guarantee ensures that if the contractor fails to properly utilize the advance payment or defaults on their obligations, the beneficiary can recover the outstanding advance payment amount from the guarantor. Common in construction, infrastructure, and major procurement contracts, the Advance Performance Guarantee must comply with specific requirements set by the Bangko Sentral ng Pilipinas (BSP) and other relevant Philippine regulatory authorities.
