The pair have finally agreed terms and will fight in Las Vegas on 2 May, and while oddsmakers believe the American has the edge on his Filipino rival Penalosa says the opposite is true.
Speaking to Rappler, the former super flyweight said he believes that there are several factors that count in his compatriot's favour against the undefeated Mayweather.
He said: "Pacquiao will kick Mayweather's ass for sure. He can't handle Manny's power, he's very explosive. [Pacquiao] is hungry. And that fight challenges him. Because people say… especially after he lost to [Juan Manuel] Marquez… that Pacquiao is done."
Penalosa added: "I don't think Mayweather's style can give a hard time for Manny. It's Manny's style that will be difficult to adjust for Mayweather's corner, especially in-between rounds. I am sure because Mayweather can't handle southpaw, Manny's punching power, and the volume power.
"Assuming that [Pacquiao] is at 200 percent in shape, in late rounds Manny can stop Mayweather."