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FILE PHOTO - Secretary Jesus Dureza (L), Philippines' government peace advisor, speaks while professor Rudy Rodil, a member of the government panel negotiating with Muslim rebels, looks on during a news briefing in Manila's Makati financial district, in the Philippines August 29, 2006. REUTERS/Darren Whiteside/File Photo

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MANILA (Reuters) - A nephew of one of Philippine leader Rodrigo Duterte's inner circle was caught selling drugs in a sting operation in the president's home city, the anti-narcotics agency said on Friday.

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 favours to those with connections.

"I commend the authorities for enforcing and applying the law without fear or favour," 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.

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.

(Reporting by Manuel Mogato; Editing by Martin Petty, Robert Birsel)

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