The pardon came after a court in Olongapo City determined that Lance Cpl. Joseph Scott Pemberton should receive early release from his 10-year sentence because he'd exhibited good behavior. He was convicted of killing Jennifer Laude.
Her family appealed the court's suggestion for early release, but Duterte granted the absolute pardon.
"It does not mean his conviction is erased," Duterte's spokesman, Harry Roque, said. "But what this means is Pemberton is free now and that there is no more question if he is entitled to good conduct time allowances."
An attorney for Laude's family called the pardon "revolting."
"We strongly denounce the absolute pardon given by Duterte," Virginia Lacsa Suarez said. "This is another injustice not only to Jennifer Laude and family, but a grave injustice to the Filipino people.
A Philippine court convicted Pemberton of homicide in the October 2014 of Jennifer Laude. He strangled her and attempted to drown her in a hotel toilet bowl after he discovered she was transgender.