Short answer. Where administration is taken in the Philippines over the insolvent estate of someone who was living abroad at death, the Philippine-based estate must, as far as practicable, be disposed of so that creditors here and elsewhere each receive an equal share in proportion to their respective credits.
What the law says
In case administration is taken in the Philippines of the estate of a person who was at the time of his death an inhabitant of another country, and who died insolvent, his estate found in the Philippines shall, as far as practicable, be so disposed of that his creditors here and elsewhere may receive each an equal share, in proportion to their respective credits.
Rule 88, Section 9 — Estate of insolvent nonresident, how disposed of. Read the full provision →
Equal treatment across borders
When a Philippine administration is opened over the estate of someone who lived abroad and died insolvent, the estate found in the Philippines is not simply handed out to whichever creditors happen to be local. The rule directs, as far as practicable, that creditors here and elsewhere receive equal treatment, so the accident of a creditor's location does not itself determine what share they get. This prevents the Philippine administration from becoming a race where local creditors seize whatever assets happen to be within reach simply because those assets are physically located in the Philippines.
Proportional, not first-come-first-served
The equality mandated is proportional to each creditor's respective credit, not an identical flat amount per creditor, so a larger debt still receives a correspondingly larger share of the limited insolvent estate, just calculated on the same footing as every other creditor's claim wherever that creditor happens to be located. A creditor owed twice as much as another is still entitled to roughly twice the share, preserving the same relative ranking that would apply if the entire insolvent estate, wherever situated, were being distributed as a single pool.
Why 'as far as practicable' matters
The qualifier as far as practicable acknowledges that a Philippine court administering only the local estate cannot always verify or coordinate precisely with whatever proceedings, if any, are happening in the decedent's home country or elsewhere. The administrator and court are expected to approximate equal, proportional treatment using the information reasonably available to them, rather than being held to an impossible standard of perfect coordination across every jurisdiction where the insolvent decedent may have had creditors or assets. In practice, that means the local court works from whatever proof of foreign claims and foreign distributions the parties are able to bring before it, and does the best it reasonably can with that record.
Related provisions
- Rule 88, Section 9 — Estate of insolvent nonresident, how disposed of
- Rule 88, Section 10 — When and how claim proved outside the Philippines against insolvent resident's estate paid