By Karen Lema and Neil Jerome Morales

MANILA (Reuters) - Philippine President Rodrigo Duterte vowed on Monday to sustain the momentum of his bloody war on drugs, telling the nation in an annual address that the fight would be as "relentless and chilling" as during his first two years in power.

Duterte told a joint session of Congress the anti-narcotics campaign, which has killed thousands of people and attracted international condemnation, was "far from over", and took a swipe at activists demanding it be stopped.

"The illegal drugs war will not be sidelined, instead it will be as relentless and chilling, if you will, as on the day it began," said Duterte, whose crackdown is now the subject of a preliminary examination by prosecutors of the International Criminal Court.

 

"Your concern is human rights, mine is human lives," he said, adding that crackdown aimed to stop drugs destroying families.

Since Duterte's war began, police have killed more than 4,500 people they say were suspected drug pushers who resisted arrest.

Human rights groups are alarmed by the bloodshed and say thousands have been summarily executed in what amounts to systematic extermination of drug users in the poorest communities. Police vigorously reject that.

Duterte read his prepared 50-minute speech in full, unlike his two previous addresses, when he abandoned his script to improvise, ramble and lambaste his critics.

He asked Congress to pass a law to give proper labor contracts to millions of people in short-term employment and vowed to aggressively protect the environment.

RE-ENERGIZED RELATIONS

He said he would approve within two days a law allowing the country's Muslim minority to start a process toward self-rule, and prevent Islamic State from furthering its influence.

Though he described ties with historic foe China as being "re-energized", he said that would not compromise Philippine territorial integrity and economic interests in the South China Sea.

China has pledged loans, grants and investment to support Duterte's bumper $180 billion infrastructure program, his core economic policy.

He said he hoped to sign before the end of the year a second tax reform bill needed to finance that to further expand one of Asia's fastest growing economies.

His promise to break a telecoms duopoly criticized by businesses and consumers would soon be fulfilled, he said, with a third player to be picked from interested foreign and local bidders offering the best services.

Duterte showed disdain for what he called irresponsible miners and their financial backers, accusing them of polluting rivers and destroying forests. He called that sickening, and warned firms to be prepared for some big changes ahead.

"Expect reforms, radical ones," he said, without elaborating. "I cannot intend to quarrel with anybody, with the moneyed, but for as long as I am here ... you will just have to contend with me."

He said he would seek to cool rising inflation by asking lawmakers to immediately pass a bill replacing quantitative restrictions on rice imports with tariffs, to bring prices down.

Thousands of demonstrators, representing the church, women's groups and labor unions, rallied near Congress to denounce what they said were Duterte's abusive, anti-poor policies. Colorful effigies of the maverick leader were burned during a street march. Duterte's supporters held counter-rallies nearby.

Duterte's opponents scoffed at his touted achievements and said his war on drugs had been a failure. Others said his speech was nothing new, including Senator Risa Hontiveros, who described it as "like watching and listening to a bad movie rerun".

(Additional Reporting by Manuel Mogato and Enrico dela Cruz; Editing by Martin Petty, Clarence Fernandez and Alison Williams)

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