The 37-year-old defeated the former welterweight champion despite Vargas’ size and reach advantage.
He used a short right-handed counterpunch to floor Vargas in the second round en route to a one-sided win in front of a crowd of 16,132 at the Thomas & Mack Center, in Las Vegas USA.
“ I feel happy ,” Pacquiao said. “ I’m trying every round to knock him down but also not be careless .”
Pacman (as he is often called) showed he still has a lot left in the tank even though he failed to get the knockout victory that he is known for the past seven years.
All three judges scored the bout for Pacquiao, two of them by 118-109 and the other by 114-113.
Pacquiao won the WBO title for the first time in 2010 when he beat Miguel Cotto . He lost it two years later to
Timothy Bradley , then got it back by winning the rematch with Bradley in 2014.
He then lost it last year to the now-retired Floyd Mayweather , who had a front row seat for Saturday’s bout.
“ Yes I invited him to come tonight,” Pacquiao said of Mayweather.
Asked if he wanted a rematch with Mayweather, Pacquiao said, “ We will see.”
Pacquiao said he was retiring following his April 9 victory over Bradley in their third fight.
He looked impressive in stopping Bradley, showing that he has recovered from a shoulder injury which he claims to have hampered him in his mega fight against Mayweather in May 2015.
The newly elected politician took seven months off from boxing to concentrate on his job in the Philippine Senate.