The condemnation of the smuggled vehicles coincided with the 116th anniversary of the BOC, an agency that Duterte once described as one of the most corrupt in government.
A classic Chevrolet Corvette and Jaguar sedan were among the wrecked cars.
But he clarified that the Philippines does not intend to ban other nations from sailing their ships through the Philippine Rise.
President Duterte watched as the second-hand vehicles, some valued as high as £82,700 were reduced to piles of scrap in a little over three minutes.
Rather than auction the valuable cars, Philippine president Rodrigo Duterte ordered the workers to just sell the twisted steel.
"They can not have cars like that".
Duterte also called for an end to smuggling and corruption as he warned officials involved in the illegal acts that he would not allow them to escape liability. Reuters cites figures from the Philippines Bureau of Customs that $2.93 million in smuggled vehicles and $2.5 million in cigarettes with fake tax stamps are among the $866 million in goods seized by the government previous year.More news: Tesco fraud trial deserted pending doable re-trial
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"It does not pay to evade taxes in the Philippines so might as well stop trying, because you will never succeed", chipped in Finance Minister Carlos Dominguez.
The cars destroyed in Davao were a Toyota Tundra, Mercedes-Benz 2012 model, two units of brand new Toyota Land Cruiser L200, a brand new Mercedes-Benz, and two units of brand new Toyota Land Cruiser V8 2013 while the vehicles condemned in Cebu were an AudiS5, 2012 Jeep Wrangler and a Mercedes-Benz CLK 350.
"Reduce them to scrap metal", Duterte said in a speech to customs employees after the event.
In the past, the Philippine Government would put into auction any smuggled luxury vehicles it got its hands on.
"All licences are indeed cancelled", Mr Duterte's spokesman Harry Roque told reporters on Tuesday (Feb 6).
The Bureau of Customs collects duties on imports and is one of the state's key revenue-generating agencies. "I support the new guidelines being made available to all countries but more importantly, whatever the result of that would come out from these researches, we will be the one to benefit from them".
The current commissioner has fired two employees and suspended 16 others for illegal activities since taking office last August, in addition to reassigning 691 personnel.