Business taxes and the Philippines

I just recently sold some software to a business in the Philippines.  When they paid their invoice, they deducted 30% for income taxes.  The told me that while my business was NOT subject to Philippine withholding and income tax, I had to apply for the tax treaty relief ahead of time.

This strikes me as something just short of extortion.  Looks like all future sales to businesses in the Philippines will be marked up by 30%.