John Paul Dureza, the nephew of Duterte's political adviser and peace negotiator Jesus Dureza, was caught selling 15 grams of "shabu" methamphetamine to an undercover Philippine Drug Enforcement Agency (PDEA) agent in Davao City on Thursday.
Jesus Dureza, a childhood friend of Duterte who leads a troubled peace process with communist rebels, said he was embarrassed by his nephew and praised the PDEA for showing no favors to those with connections.
Philippines' Duterte vows to kill more in drug war, use military
"I commend the authorities for enforcing and applying the law without fear or favor," he said in a statement.
"That's the way this no-nonsense drive of President Duterte should proceed."
Dureza's nephew would be charged with possession of drugs and firearms and had long been on the PDEA's radar, its regional chief, Adzar Albani, said.
The arrest comes weeks after a scandal came to light that led to Duterte suspending all police anti-drugs operations.
Philippines' Duterte extends deadly drug war
Rogue anti-drugs officers were found to have been involved in the kidnapping and killing of a South Korean businessman, inside the national police headquarters.
The PDEA is now leading the anti-drug campaign and will be using troops for support during raids in hostile situations.
Duterte is also sending 200 police officers facing internal investigations to a troubled southern island to fight Islamist militants.
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