Philippine President Aquino to fight graft and poverty

Reuters, Manny Mogato, MANILA, Wed Jun 30, 2010 7:35am EDT

Philippine President Benigno ''Noynoy'' Aquino III salutes as he reviews troops after he was inaugurated as the 15th President of the Philippines in Manila June 30, 2010. (Credit: Reuters/Erik de Castro)

(Reuters) - Benigno Aquino III, the son of two democracy heroes, told hundreds of thousands of people he would deliver on his promise to tackle entrenched corruption when he was sworn in as the Philippines' 15th president on Wednesday.

In his first speech as president, Aquino said he would fight poverty, improve the investment climate, and seek a just resolution to a long-running Muslim separatist insurgency in the south of the poor, mainly Catholic nation.

"My parents sought nothing less, and died for nothing less, than democracy, peace and prosperity," Aquino told an adoring crowd that police estimated at about half a million people.

"I am blessed by this legacy. I shall carry the torch forward," he said at the ceremony at the Quirino Grandstand near Manila Bay in the old part of the capital.

Many in the crowd were dressed in yellow, the color of the 1986 People Power revolution that drove dictator Ferdinand Marcos from office and swept Aquino's mother Corazon to power. Yellow confetti was sprinkled over the crowd from helicopters shortly before Aquino took his presidential oath.

"I was here 24 years ago for his mother's political rally and I came here to see Noynoy take his oath because I want him to succeed," said Sonia de la Cruz, using Aquino's nickname.

"I will pray for him. I hope he stops people in government from stealing and delivers his promises to us," said de la Cruz, 60, who had left home before dawn with her daughter and grandson to get a good spot for the ceremony.

Aquino later hosted an reception for the diplomatic community and was due to attend a street party open to the public.

IMPROVE COLLECTIONS

Aquino's first directive declared vacant about 4,000 executive positions in the bureaucracy, although he extended contracts of key officers, particularly in the presidential palace, for at least 30 days to prevent any disruption.

He also asked his cabinet to identify top spending priorities ahead of his submission of the 2011 budget in July or August.

Aquino has to tame a budget deficit that reached nearly 4 percent of GDP in 2009, which he said he will first do by enforcing existing tax laws to improve collections before considering any increase in tax rates.

Finance Secretary Cesar Purisima said the new government had a mandate to implement more aggressively existing programs against tax evaders and smugglers, with charges to be filed soon against individuals and business groups.

Prosecutions would encourage greater compliance, but the public also needed to accept that taxes had to be paid, he said.

"That's an appeal to fellow Filipinos. You cannot just sit in your living room and say, 'Well how are you going to improve the efficiency of tax collection?' We need your help," he said.

REVIEW APPOINTMENTS

Outgoing President Gloria Macapagal Arroyo did not stay for Aquino's inauguration, which was watched by former presidents Joseph Estrada and Fidel Ramos. The pro-Aquino crowd cheered wildly as she left the ceremony.

On Tuesday, Aquino said he was setting up a "Truth Commission" to investigate allegations of corruption, electoral fraud and rights abuses against Arroyo and her administration. Arroyo denies any wrongdoing.

"To those who talk about reconciliation, if they mean that they would like us to simply forget about the wrongs that they have committed in the past, we have this to say: there can be no reconciliation without justice," Aquino said.

Aquino said he would review Arroyo's "midnight" appointments -- those made late in her term. He took the oath of office from as associate justice rather than the chief justice, whom Arroyo appointed after the May 10 election.

Arroyo is not departing the political scene, having won a seat in the lower house of Congress in the May election and she could potentially block some of the new president's agenda.

WAVE OF EMOTION

Apart from corruption, Aquino faces problems from decades-old insurgencies by Muslim separatists on southern Mindanao island and Maoist-led guerrillas, and restoring public and investor confidence in governance and institutions.

"My government will be sincere in dealing with all the peoples of Mindanao. We are committed to a peaceful and just settlement of conflict, inclusive of the interests of all," he said. He made no mention of the Maoist insurgency.

Aquino's surge to the presidency was driven by a wave of emotion following the death of Corazon Aquino last August, with the family's reputation for propriety and honesty a powerful lure after two administrations dogged by allegations of corruption.

"I am hopeful he will fulfill his promises. I believe he is sincere like his mother," said Pedro Reyes, who was selling inauguration T-shirts. "He is truly for poor people like us."

(Additional reporting by Rosemarie Francisco; Writing by John Mair; Editing by Paul Tait)