MANILA - President Rodrigo Duterte vowed on Monday (July 24) to pursue his bloody war on the narcotics trade, even as he acknowledged new challenges from Muslim extremism in southern Philippines and a resurgent communist insurgency.

"We are in for trouble because we live in troubled and uncertain times. And I fear that things might get worse before they become better," he said in his second State of the Nation Address.

But Mr Duterte, 72, who began his six-year term on June 30 last year, said he would stay the course.

"I believe then as I believe now that growth and development will sputter if criminals, illegal drugs and illegal users of drugs are allowed to roam on the streets victimising seemingly within impunity the innocent, helpless," he said.

"That is why I have resolved no matter how long it takes that the fight against illegal drugs will continue because that is the root case of so much evil and so much suffering," he added.

Mr Duterte said his war on drugs, which has led to thousands killed either in police raids or by vigilantes, "will be unrelenting despite international and local pressures".

The US State Department said in a report last week Philippine security forces failed to prevent numerous terrorist attacks in Mindanao last year and Mr Duterte's war on drugs was an added burden on them. The EU has also repeatedly expressed concerns over the extrajudicial killings.

Referring to drug traffickers and pushers, Mr Duterte warned on Monday, "I will make sure that they will not have the luxury of enjoying the benefits of their greed and madness. I do not intend to loosen the leash in the campaign... Neither do I intend to preside over the destruction of the Filipino youth by being timid and tentative in my decision and action."

Turning to the ongoing war between government troops and Muslim militants for control of the southern city of Marawi, he conceded that "peace might not come during our lifetime".

"The battle of Marawi has dealt a terrible blow to our quest for peace, especially now that an alien ideology and radical shift in purpose has been injected in to the local setting," he said.

Mr Duterte said he declared martial law across war-torn Mindanao island "because I believe that was the fastest way to quell the rebellion at the least cost to lives and properties".

This story is developing.