China asserts sovereignty over almost all of the resource-rich South China Sea despite rival claims from Southeast Asian neighbors.
"It looks like everybody is making a grab for the islands there, so we better live on those that are still vacant," he told reporters during a visit to a military camp on the western island of Palawan, near the disputed Spratly group.
China asserts sovereignty over almost all of the resource-rich South China Sea despite rival claims from Southeast Asian neighbors and has rapidly built reefs into artificial islands capable of hosting military planes.
Duterte has previously sought to improve his nation's relations with China by adopting a non-confrontational approach over their competing claims in the strategically vital waters.
But the president appeared to alter his tone with his announcement Thursday, saying it was time to "erect structures there and raise the Philippine flag".
"I have ordered the armed forces to occupy all.
"At least, let us get what is ours now and make a strong point there that it is ours," he said, adding Manila was claiming "nine or 10" Spratly islands, reefs or cays.
Duterte also said he "may" visit the Philippine-claimed areas on June 12 to mark Philippine Independence Day.
An official at the Chinese embassy in Manila seemed surprised when asked by AFP to comment on Duterte's declaration, but referred questions on the matter to the Chinese foreign ministry in Beijing.
The Philippines under Duterte's predecessor Benigno Aquino had actively challenged China's claim to control most of the South China Sea, despite counter-claims by several other nations.
But the controversial Duterte, who took office last year on promises to kill thousands of people in a drug war, reversed that policy as he sought billions of dollars worth of investments and grants from Beijing.
The two neighbours are scheduled to hold talks in China in May to tackle issues related to the sea row.
The Philippine military currently has garrisons on Thitu, the largest of the Filipino-claimed islands.
After China occupied Mischief Reef in the mid-1990s, the Philippines marooned a derelict navy vessel atop nearby Second Thomas Shoal to assert Manila's territorial claim.
Vietnam, Malaysia, Brunei and Taiwan have also sparred with Beijing over territory in the disputed waterway.
US President Donald Trump's administration so far has taken a tough stance on China's claims in the South China Sea, insisting it will defend international interests there.
Trump is set to sit down with his Chinese counterpart Xi Jinping later in the day to discuss a range of issues which will likely including tensions in the South China Sea.