It also cut down its number of full-time athletes from 432 to 288, months after a poor showing of just one silver and one bronze at the Tokyo Olympics.
Malaysia had made a strong start at the SEA Games, winning all eight golds in diving, with the rest of the medals scattered across other sports.
The country's last possible hope for more medals may rest in badminton, one of the few sports it does well in internationally, with semi-finals and finals over the next two days.
HANOI (AFP, THE STAR/ANN) - A government minister says that "all Malaysians are disappointed" with what is threatening to be the country's lowest placing at the SEA Games in nearly 40 years.
Traditionally a regional power, sports minister Ahmad Faizal Azumu sounded the alarm despite Malaysian athletes on Friday (May 20) reaching the country's target of 36 golds with two days of competition to go.
But Malaysia languished at sixth in the medal standings as of Saturday morning, with hosts Vietnam way out in front with 167 golds, followed by Thailand, Indonesia, Singapore and the Philippines.
"All Malaysians are disappointed because we are not at a higher position," Ahmad said at the Games on Friday, according to state news agency Bernama.
"We should not be contented with our sixth position at the Games."
His remarks were a sharp contrast to a celebratory message from the country;s Prime Minister Datuk Seri Ismail Sabri Yaakob, who congratulated the Malaysian contingent for achieving the 36-gold target.
In a post on his Facebook page, he also expressed his pride over the achievements of Keluarga Malaysia athletes.
"Congratulations! We have managed to achieve the target of 36 gold medals through the national karate squad at the Vietnam SEA Games!," he wrote.
"For those who did not manage to bring home medals, it's okay, we as Keluarga Malaysia always support you. To the athletes who are still fighting, let's increase our medal tally!"
Malaysia is usually in the top five and the last time it settled for sixth was in 1983, when only eight nations took part, compared to the current 11.
It comes with Malaysia set to compete at the Commonwealth Games in Birmingham in July-August, while the Asian Games later this year in China have been postponed indefinitely.
"The exposure gained at the SEA Games is crucial for us to achieve more success in other multi-sport Games like the Commonwealth Games and Asiad," said Ahmad.
The Malaysian government slashed sports spending last year to RM289 million (S$90.8 million) from RM940 million the year before.