The measure has for years been a crucial missing element to a languishing peace pact with the country's largest Islamic rebel group which, along with other guerrillas, has waged a rebellion in the southern Philippines that has claimed about 150,000 lives since the 1970s.

"In every conflict, the victims are the innocents, the children, the women so try to think it over because I already signed the BBL (autonomy law)," Duterte said in a speech.

As the country's first president from the southern region of Mindanao, Duterte pressed congress to pass the law -- the farthest the peace process with the Moro Islamic Liberation Front (MILF) has gone.

The law aims to enforce a historic but fragile 2014 peace deal where the MILF vowed to give up its quest for an independent homeland and lay down weapons of its 30,000 fighters in return for self-rule in the south.

Both sides believe creating the area will head off the lure of violent extremism as well as attract investments to a region where brutal poverty and perennial bloodshed has fuelled recruitment by radical groups.

- 'Can surpass next challenges' -

The initial peace accord was signed under Duterte's predecessor, Benigno Aquino, but lawmakers then refused to pass the supporting legislation.

Rebel factions and jihadists began pledging allegiance to the Islamic State group soon afterwards and last year attacked the southern city of Marawi sparking a five-month battle that killed 1,200 people.

Muslim rebels have long been battling for independence or autonomy in Mindanao, which they regard as their ancestral homeland dating back to when Arabic traders arrived there in the 13th century.

In 1996, another major rebel group, the Moro National Liberation Front (MNLF), signed a peace deal with the government that created a Muslim autonomous area in the south.

But critics, including the MILF, said it had failed to bring peace and development.

Under the law Duterte signed, a new political entity known as the Bangsamoro would replace the current autonomous region, gaining more power and resources.

The new region is to keep 75 percent of taxes collected in the area as well as receive an annual fund allocation worth five percent of national revenues, or about 60 billion pesos ($1.12 million).

The region is also to have a parliament and Islamic shariah courts exclusively for cases involving Muslims.

Under the peace agreement, the law also needs to be approved in a regional referendum, which is widely expected to pass after years of struggle for more autonomy.

Despite criticism that the new law was weaker than the 2014 peace deal, the MILF said it was largely satisfied with the measure.

"Although we still have more challenges ahead but after surpassing the challenges for more than 40 years, we are confident that we can surpass the next challenges," MILF chairman Murad Ebrahim Murad said.