The justices overwhelmingly endorsed President Rodrigo Duterte's decision to allow the burial at the "Cemetery of Heroes" in Manila, three decades after a famous "People Power" revolt forced Marcos into US exile and restored democracy.
"There is no law that prohibits the burial," court spokesman Theodore Te said as he read a summary of the judgement.
Hundreds of Marcos supporters outside the Supreme Court cheered. But opponents who had petitioned the court to reject the plan staged a rally nearby and voiced deep anger.
"If the torturer is a hero, what does that make of the victims? What does that make of the millions who overthrew a dictator? It is a horrible and tragic ending to one of the most tragic chapters of our history. History was altered today."
Marcos ruled the Philippines for two decades until key military figures turned on him and millions took to the streets in the "People Power" uprising, a largely peaceful event that inspired democracy movements throughout Asia and around the world.
The dictator also oversaw widespread human rights abuses to maintain his control of the country and enable his plundering, with thousands of people killed and tortured, previous Philippine governments said.
Anti-corruption watchdog Transparency International in 2004 named Marcos the second most corrupt leader of all time, behind Indonesian dictator Suharto.
The Philippines' foreign debt went from USD 2.67 billion in 1972, when Marcos declared martial law, to USD 28.2 billion in 1986, according to the World Bank.
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