Metro Manila (CNN Philippines, October 8) — Malacañang on Saturday said the ₱40-billion settlement from tobacco company Mighty Corp. will fund the infrastructure programs of the Duterte administration.

"This landmark tax settlement is the largest in Philippine history; and will go a long way in funding the Duterte administration's infrastructure program," Presidential spokesman Ernesto Abella said in a radio briefing.

The cigarette manufacturer was accused of failing to pay excise taxes worth ₱37.9 billion and for using fake tax stamps on its cigarettes.

Mighty Corp. had earlier offered the government a ₱25 billion settlement, which President Rodrigo Duterte said will be used to rehabilitate the war-torn city of Marawi and the earthquake-damaged Ormoc City.

The Bureau of Internal Revenue had earlier filed three tax evasion raps against the tobacco company, but withdrew the charges following the settlement.

READ: DOJ junks tax evasion raps vs Mighty Corp

In July, BIR said Mighty Corp. had already paid an initial payment of ₱3.44 billion to the government through a manager's check.

The tobacco company was acquired by Japan Tobacco International on September for ₱45 billion, paving the way for the government to collect the remaining ₱25.5 billion in the settlement.

READ: Finance Dept receives partial payment of P25-billion tax settlement offer from Mighty Corp.