MANILA -- Discussions on oil and gas cooperation between the Manila and Beijing should "proceed on the basis of Philippine law" including an outcome ratio, Foreign Affairs Secretary Teodoro Locsin Jr. said Monday.
There is "no outcome sharing" prescribed in the memorandum of understanding, said Locsin, who earlier described it as an "agreement to agree."
But a presidential decree mandates 60-40 in favor of the Philippines, Locsin said. The Philippine constitution also caps foreign ownership in certain businesses at 40 percent.
"When the working group gets into it, they will understand that they must operate on the Philippine side, within Philippine law—60-40. On the Chinese side, they will also understand that Philippine side needs to proceed on the basis of Philippine law," he said.
China can "walk away" from negotiations if it insists on equal sharing of the profit because that is "not allowed by our domestic law," Locsin told ANC's Headstart.
"They can either walk away from the table or agree to it. That would not be, in case some lunatic says ‘Then China has submitted’—no, China has decided it’s worth the price of investment, 60-40," he added.
Manila and Beijing signed 29 deals during Chinese President Xi Jinping's visit to the Philippines last week.