President Rodrigo Duterte said the government would set aside its rights over the Philippine exclusive economic zone to reach an agreement with China to develop the area, believed to be rich in oil and gas resources.

"That exclusive economic zone is part of the arbitral ruling which we will ignore to come up with an economic activity," Duterte told reporters on Tuesday night.

Duterte earlier said China was amenable to explore the disputed area in the South China Sea with the Philippines under the sharing agreement of 60-40 in favor of Manila.

He said Chinese President Xi Jinping agreed to the deal provided that the Philippines would set aside its claim in the West Philippine Sea, which is part of the South China Sea, despite a favorable ruling by the Hague-based Permanent Court of Arbitration to Manila.

The PCA invalidated China's historic and sovereign claim in almost the entire South China Sea through its nine-dash line.

"Set aside your claim. Then allow everybody connected with the Chinese companies. They want to explore and if there is something they said, 'We would be gracious enough to give you 60 percent.' We're only 40 (percent). That is the promise of Xi Jinping," Duterte said. Celerina Monte/DMS