"The unoccupied, which are ours, let's live on it," Mr Duterte told reporters during a visit to a military base in Palawan.
The move is expected to anger China, which claims several contested shoals, islets and reefs in the territory.
China has been constructing artificial islands in the area for years.
While the Philippines occupies nine features in the South China Sea, including a World War Two-era transport ship, Beijing claims almost all of the territory. It is unlikely to welcome an increased military presence from the Philippines.