Alexis Sanchez and Eduardo Vargas fire Chile into Copa America last eight

Defending champions Chile were made to work hard for their Copa America quarter-final place as tournament debutants Panama threatened to upset the apple cart in Philadelphia.

Panama took a shock fifth-minute lead through Miguel Camargo but Eduardo Vargas struck twice to give Chile a deserved half-time advantage.

Alexis Sanchez added another and though Abdiel Arroyo pulled one back, Sanchez made it 4-2 as Chile joined Argentina in qualifying from Group D.

Camargo opened the scoring early on when he let fly from 25 yards on an angle and the ball bounced in front of goalkeeper Claudio Bravo, who failed to deal with it and saw it nestle in his net.

Mauricio Isla's effort was deflected behind as Chile sought a response, which came on the quarter-hour when Jaime Penedo saved Alexis Sanchez's low shot but Vargas followed up to sidefoot home.

Penedo saved a weak volley from a stretching Charles Aranguiz and then brilliantly tipped Arturo Vidal's header around the post. The Bayern Munich midfielder stayed forward to nod Sanchez's cross just over and then made a vital impact at the other end with a sliding interception to prevent Luis Tejada going through on goal.

Chile dominated the rest of the first half and finally got their reward two minutes before the break when Vargas headed in Jean Beausejour's left-wing cross.

Panama's half-time substitutes Gabriel Torres and Arroyo wasted no time announcing themselves, Torres winning the ball deep in the Chile half but Arroyo firing wide.

Jose Pedro Fuenzalida curled just wide at the other end and Chile got a third when Vargas, seeking a hat-trick, was crowded out and unselfishly chipped the ball to Sanchez to rifle home on the volley.

Torres shot wide and was then unable to convert Arroyo's cut-back under pressure from Isla, but Arroyo set up a tense finish when his far-post header from fellow substitute Ricardo Buitrago's free-kick found the net with Barcelona keeper Bravo again badly at fault.

Penedo dived to save from lively Chile substitute Edson Puch but Sanchez had the final say with a deft header from Fuenzalida's cross.