BEIJING (Sputnik) — On Saturday Duterte said that he would set aside the issue despite the Hague-based Permanent Court of Arbitration's decision. The court ruled that Beijing had no legal basis to claim historic rights to South China Sea resources and that it had violated the Philippines' sovereign rights in the country's exclusive economic zone.
“We noticed the reports about Duterte’s statements and we welcome them. We think that Duterte’s policy on South China Sea tribunal complies with fundamental interests of both countries and nations [China and Philippines]. The policy also reflects more profound political trust and friendship between the countries”, the Foreign Affairs Ministry spokeswoman Hua Chunying said at the press briefing.
The decision to lay aside the dispute was determined by the changes in the Philippines' Southeast Asia politics, particularly the deterioration of Manila's relations with Washington. On Saturday, Duterte threatened to repeal the Visiting Forces Agreement (VFA) with the United States after the US aid agency Millennium Challenge Corp. freezed the funding for anti-poverty programs in the Philippines.