Hundreds of thousands of people applauded and yelled Aquino's nickname, "Noynoy," as he took his oath before Supreme Court associate justice Conchita Carpio-Morales at Manila's seaside Rizal Park.
Vice President Jejomar Binay was sworn in before Aquino in the nationally televised ceremonies that resembled a music concert, with celebrity singers and an orchestra belting out nationalist and folk songs. Yellow confetti rained from two helicopters.
Diplomats from more than 80 countries and two former Philippine presidents — Fidel Ramos and Joseph Estrada — attended. East Timor President Jose Ramos Jorta, a longtime supporter of the Aquino family, and US Trade Representative Ron Kirk, sent as head of the American delegation by President Barack Obama, were among the foreign dignitaries.
In a brief but awkward moment, Aquino and outgoing President Gloria Macapagal Arroyo shared a traditional limousine ride from the presidential palace to his oath-taking ceremony. Arroyo was given military honors then left to take her oath as a member of the House of Representatives, where she won a seat in the May 10 elections.
Many in the crowd booed Arroyo loudly as she drove away, some chanting "Go home!" The new president and his mother, the late former President Corazon Aquino, had called on Arroyo to resign and joined street protests against her.
Aquino, wearing a native formal shirt and speaking in Tagalog, promised to fight corruption, particularly in the notoriously graft-ridden bureaus of customs and internal revenue. He pledged to bring a new era of good governance, reforms and a bureaucracy that will be sensitive to the plight of the common folk.
Yellow confetti was sprinkled over the crowd from a helicopter shortly before Aquino took his presidential oath.
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.
"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.
Businesswoman Marivic Roy, who came with her husband and two sons, said, "He signifies change and hope. That's why people gravitate toward him. We feel there is hope for this country."
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 fulfil 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."
Aquino has had a lackluster 12-year legislative career and there is a concern that, like his mother, he could be personally honest but lack the political savvy to run a government successfully and push through a reform agenda.
Aquino's father, Benigno Aquino Jr, was a Marcos-era opposition leader assassinated in 1983 on the tarmac of the Manila airport while in the custody of security forces as he returned from a period of political exile in the United States.
In his inaugural speech, 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 Southeast Asian 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.
"Today our dreams start to become a reality," Aquino said. "It's the end of a leadership that has long been insensitive to the suffering of the people." In a widely applauded portion of his speech, Aquino said he also suffered in the past like ordinary Filipinos by being stuck in heavy traffic as siren-blaring convoys carrying powerful people breezed by. "No more ," he said, using the local term for blaring sirens.
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.
Addressing his new justice secretary, Leila de Lima, Aquino ordered her to deliver "true and complete justice for all."
The rise of Aquino, a low-key legislator and son of democracy icons, reflects the Filipinos' longing for moral and political renewal. Outgoing President Arroyo's stormy 9-year rule saw four failed power grabs and opposition impeachment bids against her over allegations of vote-rigging, corruption and rights abuses.
The new Cabinet unveiled Tuesday has mostly Aquino allies and defectors from Arroyo's government. Aquino said he would immediately form an independent commission to investigate corruption allegations against Arroyo and other scandals during her presidency.
"They will as necessary prepare and prosecute the cases to make sure those who committed crimes against the people will be made to pay," Aquino said, adding that the commission will be headed by a respected retired chief justice, Hilario Davide.
"I can forgive those who did me wrong, but I have no right to forgive those who abused our people," Aquino said.
Arroyo has steadfastly denied any wrongdoing. Aquino's campaign promise to investigate Arroyo has been seen as a potential political flash point early in his six-year term.
"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.
After the inauguration, Aquino headed to the Malacanang presidential palace for a working lunch with his new cabinet, which he announced on Tuesday.
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 also 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.
