Duterte, who swept to power in May on a wave of public anti-establishment frustration over crime and poverty, wants to switch from a centralized government to devolve power to long-neglected poor provinces and spread wealth more evenly.
"By granting more, and specific, powers to the state governments, the red tape that leads all the way to Manila will be shaved off, reducing delays and uncertainties inimical to business," House Speaker Pantaleon Alvarez told businessmen, according to Reuters.
Duterte met Alvarez, a close ally, and Senate President Aquilino Pimentel late on Wednesday to decide how best to change the nearly 30-year-old constitution, he added.
The aim is for a plebiscite on the constitutional changes to be held along with mid-term elections in 2019, Alvarez said, followed by a transition period until the expiry of Duterte's six-year term in 2022.
The proposal will create 11 to 12 states, lumped together from rich and poor provinces, with greater autonomy.