Short answer. Yes. A guarantor's usual shield — the benefit of excussion, which forces the creditor to exhaust the borrower's property first — does not apply when the borrower is insolvent. Article 2059 lists insolvency of the debtor as one of the situations where excussion does not take place, so the creditor may proceed against you.
What the law says
The excussion shall not take place: (1) If the guarantor has expressly renounced it; (2) If he has bound himself solidarily with the debtor; (3) In case of insolvency of the debtor;
Civil Code, Article 2059 — When Excussion Does Not Apply. Read the full provision →
What excussion normally gives a guarantor
A guarantor is not, as a rule, a first line of payment. The benefit of excussion means the creditor must first go after the principal debtor's property and exhaust it, turning to the guarantor only for whatever remains unpaid. That ordering is the guarantor's core protection — it keeps him in a genuinely secondary position, liable only when the borrower truly cannot cover the debt from his own assets. It is what distinguishes a guarantor from someone who has agreed to be equally and directly liable alongside the borrower.
Insolvency switches it off
Article 2059 sets out when that protection disappears. It provides that the excussion shall not take place in several situations, and one of them is in case of insolvency of the debtor. The logic is practical: excussion exists so the creditor first collects from the borrower, but where the borrower has no assets to collect from, insisting on that exercise would be an empty ritual that only delays the creditor. So the law dispenses with it, and the creditor may move directly against the guarantor for the obligation.
The other situations that remove the shield
Insolvency is not the only trigger. The same article strips the benefit where the guarantor has expressly renounced it, and where he bound himself solidarily with the debtor — in which case he was never merely secondary to begin with. It is also lost where the debtor has absconded or cannot be sued in the Philippines without leaving a representative, and where it may be presumed that going after the debtor's property would not satisfy the obligation anyway. In each case the common thread is that requiring the creditor to pursue the debtor first would be futile or has been waived.
What still protects the guarantor
Losing excussion does not mean losing everything. A guarantor generally keeps the defenses that belong to the debt itself — if the underlying obligation is not yet due, is invalid, or has been paid, those points remain open to him. And a guarantor who is made to pay ordinarily has a right to be reimbursed by the borrower afterward, even if, given the borrower's insolvency, that right may be difficult to realise in practice. The article decides only whether the creditor must go through the borrower first; it does not enlarge the guarantor's liability beyond the obligation he actually guaranteed.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Trade and Invesment Development Corporation of the Philippines also known as Philippine Export-Import Credit, G.R. No. 233850, July 1, 2019 — read the decision on LawPhil →