The Philippines has been rated as having a weak creditor rights environment, with S&P Global Ratings flagging a “high” rule-of-law risk.
Unpredictable enforcement of contracts, inconsistent timelines for insolvency cases, and a lack of reliable data on creditor recoveries weighed down the country’s score.
In S&P’s insolvency jurisdiction rankings, the Philippines was placed in Group C — one tier below Malaysia and India in Group B. The assessment measures recovery prospects for creditors after a default, taking into account insolvency legislation, its practical implementation, and the predictability of outcomes.
S&P noted limited evidence that priority claims are upheld and insufficient records showing whether creditors typically recover at least 30% of what they are owed.
High rule-of-law risks make insolvency outcomes difficult to forecast, the agency said, compounded by varying case durations that complicate estimates of recovery value.
Despite these weaknesses, the Philippines does have laws that support restructuring and has adopted the UN’s model framework for cross-border insolvency.
Comparisons with Malaysia and India
Malaysia, currently adopting the UN model law through its Cross-Border Insolvency Bill 2025, offers a more predictable legal base for creditors, although it still lacks strong recovery data following recent reforms.
India has achieved better results under its Insolvency and Bankruptcy Code, with average recoveries rising above 30% from previous levels of 15–20%. The framework has strengthened creditor influence in restructuring processes.
However, S&P said India still trails more advanced counterparts, with recovery values that remain relatively low on a global scale.
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