China claims almost all the waterway where US$3 trillion (HK$23.4 trillion) worth of sea-borne goods passes every year, building and militarizing artificial islands. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have conflicting claims.
"So, it's about time, either in the bilateral or in the plenary, I should be bringing this important matter to the surface," Duterte said before leaving for Vietnam.
He said China had to make it clear to Southeast Asian countries its intentions in the South China Sea. "You want to control the passage or do we have the free passage?" he said, adding he would not be confrontational.
The firebrand leader has been conciliatory to Beijing, despite a ruling from an international arbitration court favoring the Philippines in its territorial dispute with China.
Duterte has repeatedly said he will raise the sea dispute at the proper time and avoided the issue when Manila hosted two regional meetings this year.
The two countries will also negotiate a military protocol to avoid maritime miscalculations, Manila's defense minister said after a brief standoff near a Philippine-occupied island in a disputed part of the South China Sea.
Delfin Lorenzana said the Philippines tried to put up makeshift structures on a sand bar about four kilometers off Thitu island in the Spratly archipelago in August, but China objected and sent ships to the area.
Duterte sought to defuse tensions by ordering troops to pull out. Construction was stopped.
"We intend to sit down with China to draft and agree on a protocol to resolve immediately any incident," he said. He hoped talks could start this year.
China-Philippines relations have often been frosty over the South China Sea, but ties have warmed under Duterte, who prefers to not provoke Beijing and wants to tap it for loans and investment.