Manny Pacquiao walks to his corner after referee Kenny Bayless (center) stops the fight in the 12th round to save Puerto Rican Miguel Cotto from further punishment in their WBO welterweight boxing title fight Saturday in Las Vegas. (AP)

The Philippines erupted into a frenzy of joy Sunday after Manny Pacquiao pummelled Puerto Rican champion Miguel Cotto in a history-making bout.

''Manny is the greatest. I felt as if I won a million pesos!'' cried a jubilant 50-year-old Dominador Hernandez as he pumped his hands into the air. ''He is our champion and he will be for a long time.''

A cripple practically all his life, Hernandez limped for two hours on crutches to join about 5,000 other fans who crowded a covered basketball court in Manila's notorious Tondo slums to watch the fight on a wide screen.

Even petty criminals took the day off, officials said, and soldiers fighting militants in the south silenced their guns for the bout.

Pacquiao, 30, took the World Boxing Organization welterweight title by stopping Cotto 55 seconds into the 12th round, becoming the first fighter to win seven world titles in seven weight classes.

A shirtless man ran around the streets outside the Tondo gymnasium waving a Philippine flag, and while liquor was banned inside, others outside drank local gin as they listened to a live feed of the bout.

Jeeps and cars honked their horns, while the city government distributed bowls of hot porridge to a throng of men and women elbowing each other for space shortly after the fight was stopped.

In Tondo's other dark alleyways reeking of urine, entire families sat around television sets outside their shanties and passed around beer.

''The criminals all watched the fight. Today, we are all one,'' said district chief Marcel de Asis, who said people started lining up at dawn to secure free seats.

''This is a glorious day for the Philippines especially after the typhoons.''

''Once again, Filipino grit and determination triumphed over great odds,'' President Gloria Arroyo's spokesman Cerge Remonde said. ''The president joins the entire nation in rejoicing over the unprecedented victory of Manny Pacquiao over Miguel Cotto.''

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

In the strife-storn southern Philippines, the military silenced their guns against Al Qaeda-linked Abu Sayyaf militants to watch from the trenches.

''In the (southern Philippine) headquarters, we set up a big screen for our soldiers to support our icon,'' regional chief Major General Benjamin Dolorfino said. ''The ground units also had their satellite feed to boost troops morale.''

Eid Kabalu, a spokesman for the 12,000-strong Moro Islamic Liberation Front (MILF), which has been waging a separatist rebellion since 1978 but has opened peace talks with Manila, said rebel commanders on the ground also joined in the jubilation.

''There was remote telecast in the remote areas, but everybody watched,'' Kabalu said.