Fishing deal with China: Palace claims Duterte made 'undocumented, informal agreement'

MANILA, Philippines — President Rodrigo Duterte earlier revealed that he and Chinese President Xi Jinping agreed on a
fishing deal in the West Philippine Sea as early as 2016.

In a speech last week, Duterte claimed that he and Xi agreed that Chinese fishermen would no longer block Filipino
fishermen from Scarborough Shoal as long as the Chinese would have access to Recto Bank.

"Will you allow the Chinese to fish? Of course. That's what we talked about before, that's why we talked. And that was
why we were allowed to fish again. It was a mutual agreement," Duterte said at a speech in Malacañan last week.

According to Duterte, this was what he discussed with Xi during his first state visit to Beijing three years ago.

In the same speech, the president argued that banning Chinese fishermen in the Philippine exclusive economic zone
would cause a problem.

Presidential spokesperson Salvador Panelo, meanwhile, revealed that the two leaders did not formally sign documents
on the supposed fishing deal in Philippine waters.

"That was more of an informal agreement rather than documented," Panelo told ANC's "Early Edition" Monday.

In a separate press briefing at Malacañan, Panelo insisted that the agreement between the two leaders were verbal.

"I don't think they signed (an agreement). They just talk. You know world leaders they have a word of honor," Panelo said
in Filipino.

The Malacañang spokesman added that Filipino fishermen would not have been able to access Scarborough Shoal again
if not because of the deal between Duterte and Xi.

Asked if the agreement was legally binding despite the lack of documentation, Panelo answered, "Why not? There is
nothing wrong with it."

"The president already revealed exactly what they talked about... He detailed what President Xi said, what he said, what
the effect was," Panelo added.
On matters of transparency, Panelo said the administration had been open that there was an agreement between the
Philippines and China under the term of former Foreign Affairs Secretary Alan Peter Cayetano.

In June 2018, Cayetano disclosed that the Department of Foreign Affairs was working with the Chinese Foreign Ministry
on a tentative fishing agreement but nothing was written yet.

According to Cayetano, the agreement was a consensus between Duterte and Xi during their previous meeting. The
supposed fishing deal was being discussed by the bilateral consultative mechanism between the two countries.

Cayetano then made clear that the July 2016 arbitral ruling through the United Nations Convention on the Law of the Sea
was being incorporated in the negotiations.

The Duterte administration initially called for restraint and sobriety when the arbitral award was issued three years ago
but according to Panelo, the president might invoke the ruling at the end of his term.

Panelo, however, raised the possibility of not invoking the arbitral ruling if the Philippines already gets what it wants.

"If they agree with our demands in the negotiations, what else will we invoke? Nothing," Panelo said in Filipino.
BIR to collect income tax on foreign workers starting July

The Philippine government will start collecting taxes from foreign workers who have previously failed to pay their
obligations, the Department of Finance (DOF) said Monday.

On the sidelines of the pre-State of the Nation (SONA) press conference, Finance Secretary Carlos Dominguez III said the
Bureau of Internal Revenue (BIR) will enforce stricter measures to collect proper taxes from foreigners working in the
Philippines.

“Implementation ng law lang ‘yan. And I asked them specifically to track how much they are collecting. They said they
will start making collections … in July,” Dominguez told reporters in Pasay City.

“I think, going forward, they will already start implementing in July,” he said.

The government has formed a task force that consists of the Department of Labor and Employment (DOLE), Bureau of
Immigration (BI), the Philippine Amusement and Gaming Corp. (PAGCOR), and BIR to impose stricter measures and
collect taxes from foreign workers.

“It’s everybody … Foreigners who work here, they should be paying taxes just like Filipinos who work abroad, who pay
taxes,” said Dominguez.

“This is a matter of their citizens, Chinese citizens, of Ethiopians, or British who work here who are subject to our tax
laws,” he said.

The DOF in April said it wanted to collect an estimated P32 billion in annual income tax from foreign nationals working
for Philippine online gaming operators (POGOs).

Citing data from the DOLE and the BI, the DOF said there are some 138,000 foreign nationals working for POGOs.

Working on the assumption that each foreign national earns an average of $1,500 a month and taxed at 25% of gross
income, the DOF came up with a rough calculation of P32 a billion a year in income tax collections.

The number, however, does not include data from the Philippine Economic Zone Authority and the special economic
zones in Bataan and in Aurora.
“We cannot believe some of the claims that their salary is only $500 a month,” Dominguez said Monday, adding that
advertisements in China entice workers to work in the Philippines for thousands of dollars.