He gave gruesome details of gangland-style hits, including feeding one victim to a crocodile.
Mr Duterte`s spokesman rejected the allegations, saying investigations into his time as mayor had gone nowhere.
Mr Matobato, 57, said he was a member of the Davao Death Squad, a notorious vigilante group allegedly responsible for hundreds of killings.
"Our job was to kill criminals like drug pushers, rapists, snatchers," he said.
But he also claimed that Mr Duterte`s opponents were targeted too, including four bodyguards of a local rival for mayor, Prospero Nograles.
Mosque attack
Victims would be shot or strangled, he said, with some disembowelled and dumped into the sea so fish could eat them.
He told the Senate panel he went from a witness protection programme into hiding when Mr Duterte became president, fearing for his life.
Mr Matobato also alleged Mr Duterte ordered the bombing of a mosque in retaliation for an attack on Davao Cathedral in 1993.
On this claim Mr Duterte`s spokesman, Martin Andanar, said "I don`t think he is capable of giving those orders".
He said the country`s Commission on Human Rights had failed to even prove the existence of the Davao Death Squad.
Prospero Nograles` son Karlo, a Davao city representative, denied Mr Matobato`s account relating to his father`s bodyguards.
"I don`t know what this guy is talking about.
"I can only suspect that this guy is being manipulated by some people to only serve their own selfish interests," he wrote on Facebook.
The woman leading the Senate inquiry into extra-judicial killings, Leila de Lima, is a strong critic of Mr Duterte and has been accused by him of having links to the illegal drug trade, something she denies.
Mr Duterte became mayor of Davao in 1988, and his tough stance saw crime rates plummet, an approach he has vowed to replicate at national level.
Since his election this year more than 3,000 drug users and dealers have been killed amid international alarm over human rights violations.
But Mr Duterte has dismissed concerns over his drugs policies, calling UN Secretary General Ban Ki-moon "a fool" and referring to US President Barack Obama as a "son of a whore", something he later said he regretted.
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