Malaysia remain two spots ahead of Singapore in the latest FIFA rankings, but both nations plummeted on the most recent list to find themselves below minnows Myanmar, Bhutan and Solomon Islands.
The Malaysians are 167th, with Singapore in 169th after both national teams endured depressing results in June.
In AFC Asian Cup qualifiers, Malaysia collapsed at home to lose 2-1 to an under-strength Lebanon on June 13, while the Singaporeans suffered an identical fate to blow a lead as they hosted Chinese Taipei at Jalan Besar Stadium on June 10.
Singapore are now only just above Nepal (170th), Laos (171st) and Aruba (172nd). Malaysia are level with Belize (167th), but trail Sudan, Bhutan and Cuba, who are all tied at 164.
Philippines stayed stable at 126th to hold their position as Southeast Asia's top-ranked country, as AFF Suzuki Cup champions Thailand fell four places to 131st, with Vietnam dropping two spots to 133rd.
Hong Kong, who face Malaysia in Asian Cup qualifying in September, rose three rungs to 147th -- 20 spots above Harimau Malaya -- while Singapore's next opponents Tajikistan fell 12 places to 149th.
Carlos Queiroz's Iran are still Asia's top-ranked nation at No. 23, followed by Asian Cup champions Australia (45th), Japan (46th), South Korea (51st), Saudi Arabia (61st) and Uzbekistan (65th).
The final matches in AFC World Cup qualifying for the 2018 World Cup will be held in August and September, with four Asian nations to be guaranteed automatic passage to Russia 2018.
World champions Germany, who won June's Confederations Cup, rose two spots to take over the No. 1 FIFA ranking from Brazil, followed by Argentina, Portugal, Switzerland, Poland and South American champions Chile.