MANILA, Philippines—Reports that then President Joseph Estrada bullied businessman Alfonso Yuchengco into selling his stake in Philippine Long Distance Telephone Co. to the group of Manuel Pangilinan 11 years ago have taken a heavy toll on PLDT shares over the last two days.

PLDT’s stock price tumbled 2.1 percent to close at 2,330 per share at the Philippine Stock Exchange (PSE). It has fallen by about 3 percent since Sen. Panfilo Lacson delivered a privilege speech on Estrada’s bullying of Yuchengco, dragging down the local stock market.

“The PSE index may not break its sideways trend at this point. Economic indicators show opposite results and provide no clear and strong catalyst for a rally. Add to that, the political noise and presidential issues create adverse effects on the market,” said Maria Arlysa Narciso, AB Capital Securities analyst.

Narciso said the stock became “tainted with politics and is driven by such issues” as a result of Lacson’s speech.

Erap-Ping word war

Other analysts said the trading of barbs between Lacson and Estrada would likely continue to cast dark clouds on PLDT, the most valuable Philippine company, and affiliate Metro Pacific Investments Corp. over the near term.

The companies, the analyst said, were being hit by “reputational risks” given the allegations that cast doubts on corporate governance practices.

The worst thing that could happen, one stock analyst said, would be if the Yuchengcos decided or even threatened to initiate legal action against First Pacific and/or Estrada.

Under such a scenario, First Pacific group may settle out of court, according to the analyst.

All sides benefit

The analyst said it would not be in the interest of shareholders to add fuel to the fire because all sides were benefiting from PLDT’s profitability, with First Pacific as the captain of the ship.

The situation could worsen, the stock analyst said, if other former shareholders, such as the group of former PLDT president Antonio “Tonyboy” Cojuangco, would come forward to claim that they too were coerced into giving up their stake and to demand that their holdings be restored.

“But that’s a scenario with a lot of uncertainty,” the analyst said.

“The fact that the fight between Estrada and Lacson is just heating up, new information is likely to crop up regarding the allegations,” the analyst added.