The Philippines has agreed to demands from Taiwan to officially apologize for the fatal shooting of a Taiwan fisherman, but did not agree to demands for compensation, Taiwanese media said Tuesday.

Antonio Basilio, head of the Philippine's representative office in Taiwan, has agreed to demands to make a formal government apology, investigate the incident, and punish those responsible, but did not officially make any promises regarding compensation for the victim's family, Taiwan-based media reported Tuesday.

According to ETTV, Taiwanese authorities have stated that Taiwanese fishermen are authorized to use "light weapons" to fend off attacks from Philippine vessels.

Taiwan said it would conduct a naval drill in waters near the Philippines after Manila failed to respond to an ultimatum issued by Taiwan, stating that the Philippines must, before midnight Tuesday, make an official apology over its killing of a Taiwanese fisherman.

"We've prepared ourselves and staging an exercise in the Bashi Channel is one of the military's options," a Taiwanese official told AFP on Tuesday. "Whether or not to conduct the drill would be up to the reaction of the Philippine government."

According to Taiwan's Central News Agency, the exercise will be held Thursday and involve a Kidd-class destroyer, a Perry-class frigate and three coastguard frigates. A number of fighter jets will also be involved in the drill which will for the first time target the Philippines as the enemy, it said.

Chinese Foreign Ministry spokesman Hong Lei said Tuesday that China hopes the Philippines will conduct a thorough investigation into the incident and provide a concrete explanation at an early date. "We have always firmly safeguarded the safety and legitimate rights and interests of our Taiwan compatriots," Hong said.

The report of Taiwan's planned drill came as Philippine Presidential Spokesman Edwin Lacierda said Tuesday his country would rather defer any comments on its response to Taiwan's ultimatum. 

The Philippine Coast Guard shot dead a Taiwanese fisherman, Hung Shih-cheng, 65, on Thursday in waters around 164 nautical miles (304 kilometers) southeast of the southernmost tip of Taiwan after the Philippine ship chased the fishing vessel for about one hour.

Taiwan's leader Ma Ying-jeou Saturday demanded the Philippines apologize for the incident, bring those responsible to justice, and offer compensation by Tuesday midnight.

But Philippine President Aquino on Monday declined to respond to Ma's demand at the government level, citing Manila's "one-China policy."

The one-China policy is already widely recognized by the international community and it is unjustified for the Philippines to use this as excuse to evade its apology over the killing of the Taiwanese fisherman, said Ji Qiufeng, a professor of international relations at Nanjing University.

"I think Manila's real intention is to drive a wedge between the Chinese mainland and Taiwan on the issue (of the killing of the fisherman) and reap benefits from this," Ji said.  

"The mainland and Taiwan should respond to this crafty strategy carefully and not play into the Philippines hands," he added.

Taiwan has warned it would freeze the right of Filipinos to work in Taiwan and recall his representative from the Philippines if Manila does not meet the demands. The Pilipino Manpower Agencies Accredited to Taiwan (PILMAT) on Tuesday urged the Philippine government to take measures to prevent Taiwan from enforcing a hiring freeze.

The Philippines leadership does not have a grand international outlook when executing their country's diplomatic, political and military strategies, making the country head into disputes repeatedly with its neighbors, said Song Xiaojun, a Beijing-based military expert. The Philippines leadership is largely composed of short-sighted politicians and this determines the Philippines often reckless diplomatic moves, Song said.

Agencies contributed to this story