The Philippines was brought to a standstill as the country celebrated Manny Pacquiao's victory over Miguel Cotto.

After winning the WBO welterweight title in the early hours of this morning, Pacquiao was hailed as "an inspiration to Filipino youth" by President Gloria Macapagal Arroyo, who also sent her congratulations.

"I hope we can all learn from his example so that, together, we can also move forward as a nation," Arroyo said in a statement read by her spokesman, Cerge Remonde.

In the strife-torn southern part of the country, troops fighting Al Qaeda-linked Abu Sayyaf militants silenced their guns to watch from the trenches.

Filipinos erupted in wild cheers and thunderous applause in cinemas, bars, restaurants and crowded neighbourhoods across the Philippines as Pacquiao collected the title with a 12th-round stoppage of the Puerto Rican champion.

The victory enhanced Pacquiao's reputation as the best pound-for-pound fighter in the world and earned him a seventh title in an unprecedented seventh weight class.

"He's the greatest fighter in boxing history," engineer Hermogenes Gutierrez, who watched the bout at a restaurant with his family, said. "He has made all Filipinos proud. He's our national hero."

Officials at the country's main power company said electricity consumption rose nearly 13 per cent over normal weekend demand during the bout.

Traffic in the capital Manila's streets was light as traders, taxi drivers and even petty criminals took time to watch Pacquiao fight against Cotto, who was the underdog.

"I flew home from Bangkok last night just to watch this fight," Ricardo Reyes, an electronics engineer, said, before the start of the fight while dining at a sports bar in Manila's business district. "I don't want to miss this historic bout. I'll fly back to Bangkok tonight because I have to report to work tomorrow."

At many Sunday masses across the Roman Catholic country, Filipinos prayed for Pacquiao's victory. "I went to church early today for Manny's victory," said Angelo delos Santos, a 51-year-old taxi driver.

Security forces were on alert in Manila and police officers made the rounds in shopping malls and crowded neighbourhoods. "Historically, we register near zero crime during Pacquiao's actual match but we sent out patrols to make sure no criminals will take advantage of the situation," Leonardo Espina, national police spokesman, said.

Giant screens were put up in gymnasiums and parks across the country by local politicians to win support from poor voters while lawmakers hurriedly approved the government's budget bill last week as many planned to fly to Las Vegas for the fight.

Days before his fight, Pacquiao had dedicated the bout to his countrymen battered by successive storms since September which left 1,128 people dead, with large areas outside Manila still struggling with floods.

The new champion hosted a party after the fight, during which he donned a trilby, despite having a large bandage on his head, and sang to the guests.