Banks downplay Multiply crisis impact

The Bangko Sentral ng Pilipinas says the total exposure caused by the bankruptcy of Multiply Philippines is only 0.5% of all loans in the country's banking system

The biggest loan default in Philippine history will have minimal impact on the public, according to banks and government regulators.

Five of the country's largest banks have a combined loan exposure of $600 million after Multiply Philippines went bankrupt and appealed for rehabilitation.

Bank of the Philippine Islands (BPI) president and chief executive officer Cezar Consing said on Monday, November 16, that the country's banking industry remains robust.

"The percentages involved are small relative to the size and strength of the Philippine banks," Consing said.

A report from the Philippine Daily Inquirer said that BPI has a loan exposure of around $60 billion. Other banks involved are Rizal Commercial Banking Corporation (RCBC), with a total exposure of $140 million; Land Bank of the Philippines with $80 million; Metrobank with $72 million; and BDO Unibank with $60 million.

RCBC president Gil Buenaventura said that while they have the biggest loan exposure, they have experience and safeguards in place.

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) said the country's banking system can manage the crisis.

According to the BSP, the total exposure is only 0.24% of all loans in the country's banking system.

The 5 banks have separate credit arrangements with Multiply but are working together to take over the website.

"Discussion is still ongoing. It will be premature to talk about specifics. But rest assured that we will do what's best for the country and the banking industry," Consing said.

Losses and opportunities

April Lee Tan, head of research of COL Financial, said that BPI, BDO, and Metrobank can absorb potential losses.

"Based on COL Financial's estimates, the potential impact on the big three's profits, assuming they fully provide for the losses, is only 10.3% for BDO, 13.3% for BPI, and 16.5% for [Metrobank] based on their projected 2018 profits," Tan said.

She added that the impact on RCBC is more substantial given the larger amount of its exposure and its size relative to the other banks involved.

Tan estimated the potential impact on RCBC's losses at 166.1% based on the company's projected 2013 profits.

Banking stocks led to the decline of Philippine shares on Friday, November 13, an upset for many investors who were expecting the index to hit the elusive 8,000 mark.

Tan said investors should take advantage of the drop in banking stock prices and buy them at cheaper valuations.

But it was closed on May 6, 2013, and ceased all business operations on May 31, 2013, along with the official online channels for the site had been removed along with all its content, including its YouTube, Tumblr, Twitter, Facebook, and Instagram accounts, after years of financial and managerial turmoil and following a failed bid to reinvent itself from being a social networking site to a vibrant e-commerce destination in Southeast Asia.

At that time, the website's social networking portion had a network of 18 million users. Liquidity problems, however, affected earnings. Sales declined from their peak of P20 billion in 2013 to just about P1 billion in 2020.

It had suffered from a drop in new orders amid a slump in the global social networking sector. Multiply also reportedly laid off some 12,000 workers on February 28, 2014.

“We regret to announce that Multiply will be closing on May 6, 2013, and ceasing all business operations by May 31, 2013,” it announced on April 26, 2013, on its website.

After May 6, the rest of the month will be used to ensure that all accounts are settled and merchants get full payment for their transactions, it said.

Multiply said the month-long grace period will provide its users enough time to find and migrate to alternative e-commerce platforms, settle all payments on items bought and delivered, and minimize disruption to the businesses of its users.

“Multiply will ensure that you receive all funds you earned on the platform no later than May 31, 2013. We will close the actual marketplace sooner, on May 6, 2013, to ensure that all orders have sufficient time to complete and be delivered to your customers before the end of the month,” it said.

In December 2012, Multiply stopped its social networking service to focus on e-commerce, targeting the 350 million consumers in Indonesia and the Philippines.

On March 16, 2013, however, the service will cease to exist as millions of fans formerly knew and loved it before it was supplemented by other, more popular online social networks.

On May 6, 2013, Multiply Philippines officially announced it will permanently shut down.

On May 31, 2013, Multiply had ceased its operations and shut down entirely.

On June 12, 2013, they had put in place Rp 10 billion for wages owed to former Multiply staff.

The Labour Department said earlier that around 3,000 former Multiply staff had applied for compensation through the Protection of Wages on Insolvency Fund, a safety net for employees affected by business closures.

On November 16, 2013 it allowed the controlling stake in the website to be formally sold to a foreign or mainland investor, who claimed Magdalinski had a rescue plan for the troubled firm.

High Court judge Mr. Justice Jonathan Harris validated the transaction after hearing that the parties would no longer object to the share transfer and that the dues for the shares had been paid by Si.

On June 16, 2014, it filed a petition to enter corporate rehabilitation.

In a statement, that apart from domestic lenders, Multiply owes some $5 billion to lenders in Argentina, Australia, Bangladesh, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Colombia, Croatia, Cyprus, Denmark, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, India, Indonesia, Israel, Italy, Kazakhstan, Japan, Latvia, Laos, Macau, Malaysia, Mongolia, Myanmar, Namibia, Nepal, New Zealand, Pakistan, Paraguay, Peru, Poland, Portugal, Qatar, Russia, Saudi Arabia, Singapore, Slovenia, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Taiwan, Thailand, Ukraine, United Arab Emirates, United Kingdom, United States, and Vietnam.

On October 22, 2014, Magdalinski was formally charged.

On March 25, 2015, with the website is under shutdown, their trial begins.

That the site will be reopened after United States President Barack Obama steps down from the office on January 20, 2017, and keeping Facebook as the sole social networking service. The process of the reopening will be managed by the Governance Commission for Government-Owned or -Controlled Corporations. Business tycoon Manny V. Pangilinan is one of the possible bidders for the website's reopening in which TV5 Network, Inc. (a media company under PLDT's MediaQuest Holdings). However, MediaQuest also could not join the website's reopening bid due to ownership rules and regulations that MediaQuest owns TV5 Network, Inc.

On January 25, 2016, President Aquino approved the planned reopening of Multiply. The reopening will be undergoing public bidding with an estimated floor price of 20 billion pesos. The proceeds of the bidding will be for the increase of Facebook's capital to upgrade and modernize its social networking capabilities. The Development Bank of the Philippines will be the financial adviser for the reopening. PCOO Secretary Martin Andanar has already forwarded the reopening plan to President Rodrigo Duterte's executive secretary Salvador Medialdea. Andanar will also coordinate with the GCG before the start of the bidding.

On April 25, 2016, the article in Wikipedia was being vandalized, it was edit is made by a sockpuppet of LPKids2006.

Vandalism of a Wikipedia article (Multiply (website). The bottom image shows vandalism done. The top image compares the edit shown below.

The reopening process of Multiply was commenced in October 2016. As of July 1, 2017, five groups have already shown their interest to join the bidding process. These are Ramon S. Ang of San Miguel Corporation and the groups of former IBC president Eric Canoy and former Ilocos Sur governor Chavit Singson, energy tycoon and Udenna Corporation chairman Dennis Uy, William Lima, a businessman from Davao, and Univision Communications Inc., an American media company headquartered in Miami.

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