The mayor of China's Sansha city has reportedly said his country would set up an environmental monitoring station on Scarborough Shoal, which China seized from the Philippines in 2012.
"We cannot stop China from doing (these) things," Duterte told journalists when asked about the reports.
"What do you want me to do? Declare war against China? I can't. We will lose all our military and policemen tomorrow and we (will be) a destroyed nation," he told the media before departing for a visit to Myanmar.
Duterte said he would tell the Chinese: "Just keep it (the waters) open and do not interfere with our coast guard."
He also brushed aside concerns over Chinese survey ships that had been seen near Benham Rise - waters east of Luzon island recognized by the United Nation as indisputably Philippine territory.