Philippines President Benigno Aquino also said there is going to be a drive to stop extrajudicial killings and more money will be poured into affordable healthcare and education.

But the government's finances were in dire straits, said Aquino, who won last month's election promising to deliver economic and political stability to the Philippines.

Even so, he promised not to raise taxes.

During his speech Monday in Congress Hall, Aquino laid the poor state of affairs on the doorstep of his predecessor, Gloria Macapagal-Arroyo, who served from January 2001 but was barred from running in the recent election because of term limits.

Aquino, 51, rose to power at the polls through combination of mass disaffection with the Arroyo administration and his Aquino family background.

Arroyo and her government increasingly appeared aloof from the masses. She also increasingly suffered allegations of corruption up through the ranks of her backers.

Grievances against her administration were highlighted in February when police charged nearly 200 people, including an ally of Arroyo, with murder for their involvement in an apparent politically motivated roadside mass killing in November 2009.

It was the worst massacre in Philippines history and claimed more than 57 lives, including 32 local journalists and a pregnant woman. Among those indicted was former Maguindanao Gov. Andal Ampatuan Sr., a close supporter of Arroyo in the last general election.

When Aquino was sworn in last month, hundreds of thousands of people lined the streets in Manila amid showers of confetti dropped from helicopters.

"Today our dreams start to become a reality," Aquino said, when he spoke in Tagalog, a local language from the main island of Luzon and also the basis of the national Filipino language. "It's the end of a leadership that has long been insensitive to the suffering of the people."

His mother, former president Corazon Aquino, and his father, democracy advocate Ninoy Aquino, were revered by the people.

Ninoy Aquino was killed in 1983 at Manila Airport upon return from exile in the United States. He was believed killed by groups close to President Ferdinand Marcos.

Corazon Aquino was proclaimed the 11th president, ousting Marcos in a popular uprising in 1986. The previous year she lost an election to Marcos but the results were overturned due to polling irregularities and suspected corruption.

During her rule, she stabilized democracy and curtailed presidential powers to avoid another Marcos-era dictatorship, including limiting the president to one 6-year term. She died of cancer last August.

Improving the economy has remained stubbornly difficult. On top of that, like all previous administrations, Benigno Aquino inherited equally stubborn insurrections of religious and tribal natures in the southern part of the country.

In his state of the nation address, he promised to pursue ongoing peace talks with the various rebel groups but also challenged those groups. He would call an immediate cease-fire with the mainly communist rebels as long as they agree to work to find solutions instead of blaming each other and the government.

"Are you prepared to put forth concrete solutions rather than pure criticism and finger-pointing? If it is peace you truly desire, then we are ready to call for an immediate cease-fire. Let us go back to the table and begin talking again," Aquino said.

For now Aquino can breathe in the sweet smell of electoral success. But that could change rapidly, as he readily acknowledged during his address. It would be difficult to begin talking peace "if the scent of gun powder still hangs in the air."

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