Photos released by the Philippine Drug Enforcement Agency and provincial police showed the inmates sitting naked and cross legged in neat rows on the concrete quadrangle, illuminated by spotlights, as armed police guarded them.
A statement released by the drug enforcement agency said the raid had netted "several packets" of methamphetamines and marijuana leaves, as well as knives and mobile phones.
With the photos gaining traction on social media, human rights groups voiced concern.
"This incident clearly amounts to cruel, inhumane and degrading treatment of prisoners," Amnesty International said in a statement.
Amnesty cited United Nations' standards and Philippine laws in highlighting the obligation of authorities to ensure prisoners were not subjected to torture or ill-treatment.
Human Rights Watch also said international standards prohibited searches that intimidated or unnecessarily intruded upon a prisoner's privacy.
"The conduct of these searches -- out in the open and permitting photographs to be taken -- was inhuman and degrading and violated the prisoners' rights to privacy," Human Rights Watch said in a statement.
Philippine Drug Enforcement Agency spokesman Derrick Carreon said the stripping of the inmates was on the order of the provincial governor and the guards.
"We just provide technical expertise," he said.
Provincial government information officer Jethro Bacolod told AFP the mass stripping was "an SOP", or standard operating procedure for raids to detect contraband.
He said the prison warden had been sacked because of the contraband that was found during the raid.
The Cebu prison became famous in 2007 due to popular YouTube videos showing inmates performing choreographed dances to hits such as Michael Jackson's "Thriller".
Duterte has been waging a controversial war on drugs that has seen police and unidentified assailants kill thousands of people over the past eight months.
Amnesty has warned the killings may amount to a crime against humanity.
Duterte, who remains popular with many Filipinos, has said human rights must take a backseat to defeating the much greater menace of illegal drugs ravaging society.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)