MANILA - President Rodrigo Duterte said on Monday he has directed the finance department to accept the P25-billion offer of cigarette-maker Mighty Corp. to settle its tax liabilities.

Duterte said the settlement would not affect criminal proceedings against Mighty, which is accused of using fake tax stamps.

Mighty, which will sell its assets to Japan Tobacco International (JTI) to fund the settlement, "will no longer engage in the tobacco business" after the settlement," he said.

"This will be the biggest tax settlement on record," Duterte said in his second State of the Nation Address.

Duterte said the settlement was welcome given the "unexpected cost" of rebuilding war-torn Marawi City and earthquake-hit Leyte.

It will also avoid a long legal battle, he said.

"Let this be a lesson to others: this administration will spare no one found cheating the government of its due," he said.

Finance Secretary Carlos Dominguez III said over the weekend that Mighty Corp.'s tax settlement will rise from P25 billion to around P30 billion once the value-added tax (VAT) and other fees are included in the computation of the final sum.

Dominguez, however, said the government's full collection of the civil settlement depends on how quickly the Philippine Competition Commission (PCC) can approve the sale of Mighty Corp.'s assets to JTI.

According to Dominguez, the Bureau of Internal Revenue already received the first tranche of Mighty's settlement offer of P3.44 billion last July 20.