[BBC] The 76-year-old leader said last month that he would run for the vice-presidency in 2022. The country's constitution only permits presidents to serve a single six-year term.But he now says he will withdraw, as "the overwhelming sentiment of the Filipinos is that I am not qualified".
The move comes amid speculation that his daughter could run for president.
Mr Duterte, a controversial "strongman" figure, came to power in 2016 promising to reduce crime and fix the country's drug crisis.
But critics say that during his five years in power, Mr Duterte has encouraged police to carry out thousands of extrajudicial killings of suspects in what he has called his "war on drugs".
Mr Duterte's daughter Sara Duterte-Carpio, who is currently mayor of the southern city of Davao, has given mixed messages about running for high office.
Last month Ms Duterte-Carpio said that she would not join the race because she and her father had agreed that only one of them would stand in the election next May.
However, she has led every opinion poll conducted this year.
Mr Duterte announced his surprise retirement at the venue in Manila where he was expected to register his candidacy.