S&P Global Ratings has assessed the national insolvency regimes of Malaysia and the Philippines, assigning them jurisdiction rankings of Group B and Group C, respectively. This assessment, announced on 3 December 2025, evaluates the degree of protection afforded to creditors under each country’s insolvency laws and the predictability of related proceedings. Despite these rankings, there is no impact on existing credit ratings.
Malaysia’s Group B ranking reflects a satisfactory legal framework for creditors, with a medium level of creditor-friendliness and an intermediate rule-of-law risk. Recent legislative enhancements, such as the Companies (Amendment) Act 2024 and the adoption of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, are expected to improve the predictability of legal proceedings for both domestic and foreign creditors. However, the country still faces challenges due to limited empirical evidence on recovery realisation through insolvency proceedings.
In contrast, the Philippines received a Group C ranking, indicating a weaker legal framework for creditors. The country’s creditor-friendliness is considered weak, with high rule-of-law risk. The Financial Rehabilitation and Insolvency Act of 2010 governs insolvency law, but there is insufficient empirical evidence on its implementation and enforceability. Additionally, the preservation of asset value is low, with few precedents of creditors receiving recovery rates above 30%. Despite these challenges, the Philippines’ legal framework supports the reorganisation of entities as going concerns, and the adoption of the UNCITRAL Model Law on Cross-Border Insolvency offers some mitigation.
These jurisdiction rankings provide insight into the potential recovery prospects for creditors involved in insolvency proceedings in Malaysia and the Philippines.
