All 14 members of the court voted for a 120-day temporary restraining order on the entire Cybercrime Prevention Act of 2012. The suspension took effect as soon as the vote was tallied, a report by ABS-CBN Broadcasting Corp. said.
The court will hear arguments in January before deciding what to do when the suspension ends in February, the ABS-CBN report said.
Government departments, including those of Justice and of Science and Technology as well as the National Bureau of Investigation are to stop using the law as a basis for investigations.
The law went into effect at the beginning of this month with the intention of cracking down on all forms of cybercrime, including libel and the spread of child pornography, and drastically increasing prison sentences.
But the law drastically increases the penalty for computer-related libel, with the minimum punishment raised from six months to six years. The maximum punishment is doubled from six to 12 years in prison.
The Supreme Court acted on 15 petitions it received from groups concerned that the law would be used to muzzle government critics and curtail freedom of speech, the ABS-CBN report said.
A member of the court said the suspension was issued to avoid violations of basic rights as cited in the petitioners which included lawyers, bloggers, politicians, journalists and academics, a report by The Philippines Star newspaper said.
The court also ordered government departments to respond to the petitioners within 10 days. However, the government said it wants to review the suspension order before commenting.
A suspension "is a provisional remedy," deputy presidential spokeswoman Abigail Valte said. "It isn't in any way construed as a judgment on the merits (of the act)."
Justice Secretary Leila de Lima said they would abide by the court's decision.
"The (Department of Justice) operates under the framework of the rule of law. The (suspension) is an exercise of the power of judicial review, we respect and will abide by it," de Lima said.
The 15th petition filed, a 61-page document by a group of Internet users known as Philippine Internet Freedom Alliance, said the act allows unreasonable searches and seizures of equipment and data, thanks to the law "being vague and overly broad."
Condemnation of the law increased sharply after President Benigno Aquino signed it into law Sept. 12.
Just before the law was implemented, it was roundly condemned by Brad Adams, Asia director for Human Rights Watch.
It drastically increases punishments for criminal libel and gives authorities excessive and unchecked powers to shut down websites and monitor online information, Adams said in a written statement on the Human Rights Watch website.
"The court should now go further by striking down this seriously flawed law," said Adams.
Adams said the Philippine law defines several new acts of cybercrime, including cybersex, online child pornography, illegal access to computer systems or hacking, online identity theft and spamming.
"Anybody using popular social networks or who publishes online is now at risk of a long prison term should a reader -- including government officials -- bring a libel charge," Adams said.
"Allegedly libelous speech, online or offline, should be handled as a private civil matter, not a crime."
The Philippine government is concerned about people entering the country to engage in cybersex, the definition of which some protest groups have been concerned, a report by the BBC said.
In 2011, two Swedish men were jailed for life for running a cybersex operation in the Philippines, the BBC said. Three Filipinos were given 20-year jail sentences for helping the Swedes, who had set up the Internet and payment systems for the illegal business.
Cybersex is, according to the act, "the willful engagement, maintenance, control, or operation, directly or indirectly, of any lascivious exhibition of sexual organs or sexual activity, with the aid of a computer system, for favor or consideration."
It involves women, called "cam girls" -- including underage teenagers -- talking and performing sexual acts in front of webcams for Internet clients.
The new law gives courts the opportunity to fine clients up to $7,000 and hand down a jail term of up to six months.