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"Set aside the arbitral ruling," Duterte said, quoting Xi. "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%, they will only get 40%. That is the promise of Xi Jinping," Duterte reportedly said.
An EEZ gives a country exclusive maritime rights to resources such as fish and oil and gas within 200 nautical miles of that land mass. Manila's EEZ, mandated by the United Nation's Convention on the Law of the Sea, overlaps with waters claimed by China and Vietnam.
"As long as the two sides handle the South China Sea issue properly, the atmosphere of bilateral ties will be sound, the foundation of the relationship will be stable, and regional peace and stability will have an important guarantee," Xi said.
At a Wednesday press briefing, China's Foreign Ministry spokeswoman Hua Chunying didn't comment directly on the reported offer, but said the Philippines was "ready to expedite cooperation with China in the joint exploitation of oil and gas."
"The two sides announced the establishment of an intergovernmental joint steering committee and a working group between relevant enterprises from the two countries on oil and gas cooperation," she said.
Closer ties
The deals included a memorandum of understanding to jointly explore for energy resources, alongside agreements on basic education, agricultural cooperatives and infrastructure projects, Philippines government spokesman J. V. Arcena told CNN at the time.
Beijing claims an enormous swath of territory in the highly contested sea, overlapping competing claims from the Philippines, Vietnam, Brunei and Malaysia, among others.
And Manila has been in an awkward dance between Beijing and Washington for years over the South China Sea.
The Philippines in the past has taken a strong line on China's behavior in the area, even taking China to the international tribunal. But under Duterte, the government has increasingly looked to build an economically beneficial relationship with Beijing.