Figure 1.--Spaniosh authorities did very blittle to develop he Flilipino economy. The primary interet was the Manila Galleon Trade which was very profitable for the Spanish involved in the trade. It had little benefit for the actual Filipino population. This i the situation the mericans fond in he Philippines when they arrived (1898). This photograph could have just as easily been taken centuries earlier.

Both Mexico and the Philippines were part of the the Spanish province of New Spain. The Philippines was added to New Spain a half a century after the conquest of Mexico. Mexican independence separated Mexico from the Philippines. The Philippines when the Spanish made first contact had an extremely diverse polities (1521). They constituted entities representing a wide range of social and economic structures, ranging from stone-age bands to advances tribal entices on Luzon and other islands. We see endemic warfare (Lapulapu), piracy and slavery. 【Nadeau, pp. 23–24.】 The Spanish as they began gaining control, modified or change, disrupted the local practices they encountered. 【Nadeau, p. 24.】 Conquistador Miguel Lopez de Legazpi, with an army of Spaniards, Criollos, Mestizos and Amero-Indians (Tlaxcaltecs) landed from Mexico (1565). By this time Mexico was pacified part of New Spain (1565). He and their successors conquered the Philippines creating for the first time a unified island polity. The Spanish conquest was accelerated by Augustinian friar Andrés de Urdaneta who discovered ocean currents creating trade routes enabling ships to return to Mexico. The Spanish established the Captaincy General of the Philippines (Capitanía general de Filipinas) as part of the Viceroyalty of New Spain centered in Mexico City. The colonial economy of the Philippines received a huge boost because of the Manila Galleon Trade connecting China to Mexico with Manila as a hub. The galleons were merchant cargo vessels to carry the Chinese products in high demand by Europeans. Mexico was important because it was the shortest route back to Spain. Mexico was also important because silver from Mexican and Peruvian mines was shipped to Acapulco and would provide payment for the Chinese goods coveted by Europeans. Spain and Mexico produced very little of interest to the Chinese. Silver was, however, just what the Chinese wanted. Mexico and Spain had advanced agricultural economies. As a result, the Philippines became part of the Colombian Exchange. The Manila Galleonsm operated until Mexico achieved its independence (1815). As a result, the Philippines was governed directly by the King of Spain and the Captaincy General of the Philippines while the Pacific islands of Northern Mariana Islands, Guam, Micronesia and Palau was governed by the Real Audiencia of Manila which was part of the Philippine territorial governance. In the era before radio and under sea cables. This meant that the Philippines was isolated as never before. This actually created new opportunities for the Philippines as the ability of Spain to control he economy slackened. The Philippines continued to be a largely agricultural producer. It became the largest producer of coffee in Asia as well as an important producer of tobacco. This introduced new ideas about culture and society that the Inquisition controlled Spanish Church had kept from the Philippines. Ideas generated by the French and American Revolutions began reaching the Philippines. There was also the development of Spanish liberalism. The new immigrants along with new idea, providing the capital and technology for new economic activity. We also see the arrival of Chinese immigrants.

New Spain (1566-1815)

The Philippines when the Spanish made first contact had an extremely diverse polities (1521). They constituted entities representing a wide range of social and economic structures, ranging from stone-age bands to advances tribal entices on Luzon and other islands. We see endemic warfare (Lapulapu), piracy and slavery. 【Nadeau, pp. 23–24.】 The Spanish as they began gaining control, modified or change, disrupted the local practices they encountered. 【Nadeau, p. 24.】 Conquistador Miguel Lopez de Legazpi, with an army of Spaniards, Criollos, Mestizos and Amero-Indians (Tlaxcaltecs) landed from Mexico (1565). By this time Mexico was pacified part of New Spain (1565). He and their successors conquered the Philippines creating for the first time a unified island polity. The Spanish conquest was accelerated by Augustinian friar Andrés de Urdaneta who discovered ocean currents creating trade routes enabling ships to return to Mexico. The Spanish established the Captaincy General of the Philippines (Capitanía general de Filipinas) as part of the Viceroyalty of New Spain centered in Mexico City. The colonial economy of the Philippines received a huge boost because of the Manila Galleon Trade connecting China to Mexico with Manila as a hub. The galleons were merchant cargo vessels to carry the Chinese products in high demand by Europeans. Mexico was important because it was the shortest route back to Spain. Mexico was also important because silver from Mexican and Peruvian mines was shipped to Acapulco and would provide payment for the Chinese goods coveted by Europeans. Spain and Mexico produced very little of interest to the Chinese. Silver was, however, just what the Chinese wanted. Mexico and Spain had advanced agricultural economies. As a result, the Philippines became part of the Colombian Exchange. Amer-Indian crops like maize (corn), tomatoes, potatoes, chili peppers, chocolate, pineapples, and tobacco were introduced to the Philippines. We are not sure what Philippines crops were part of the exchange, perhaps sweet potatoes. Philippines agriculture was not nearly as advanced as that of Mexico or Spain. Tobacco became an important cash-crop in the Philippines. The Philippines essentially became a distribution center for the silver mined in the Americas, which was in high demand in Asia especially China the period. 【Schurz.】 While this made Manila an important cog in world trade, the impact on the wider Filipino economy outside the Philippines is less clear. As far as we can tell, Spain did very little to develop the Filipino economy. Spanish colonial poicy was that the colonies were to serve a market for Spanish goods and not compete with Spanish industries. Spanish authorities even attempted to restrict Asian trade through the Philippines to Mexico alone. King Charles III of Spain confirmed the establishment of the Royal Philippine Company with a 25-year charter (1787). The Basque-based company was granted a monopoly on the importation of Chinese and Indian goods into the Philippines, as well as on the shipping of the goods directly to Spain via the Cape of Good Hope. 【Eang.】

Spanish East Indies (1815-1898)

The Manila Galleonsm operated until Mexico achieved its independence (1815). As a result, the Philippines was governed directly by the King of Spain and the Captaincy General of the Philippines while the Pacific islands of Northern Mariana Islands, Guam, Micronesia and Palau was governed by the Real Audiencia of Manila which was part of the Philippine territorial governance. In the era before radio and under sea cables. This meant that the Philippines was isolated as never before. This actually created new opportunities for the Philippines as the ability of Spain to control he economy slackened. The Philippines continued to be a largely agricultural producer. It became the largest producer of coffee in Asia as well as an important producer of tobacco. This introduced new ideas about culture and society that the Inquisition controlled Spanish Church had kept from the Philippines. Ideas generated by the French and American Revolutions began reaching the Philippines. There was also the development of Spanish liberalism. The new immigrants along with new idea, providing the capital and technology for new economic activity. We also see the arrival of Chinese immigrants. This was mostly in the agricultural field, th expansion of tobacco, abacca, coffee, and sugar, European merchants worked with Chinese merchants. The latter began making small-scale loans farmers and halped finance the delivery of their harvests products to the cities. Thanks to these developments, the Philippines experienced an agricultural revolution. The industrial Revolution developed in Europe, creating an increasing demand for raw materials and investment to produce those raw materials. Spain lagged behind other European countries. Governor-General Basco attempted to open the Philippines to these pportunitiedy. And there was development of local industries to meet the rising demands of an industrializing Europe. This was limited, however, as the Philippines did not have the mineral wealth that industry was increasingly demanding. Filipino authorities abolished the Royal Company of the Philippines (1834). Authorities formally adopted free trade. Manila with its excellent harbor, became an open port for Asian, European, Latin American and North American traders. European merchants and Chinese immigrants opened stores selling goods from all over the world. With all this commerce, the Philippines opened the El Banco Español Filipino de Isabel II (now Bank of the Philippine Islands) (1851). It was the first Filipino bank. We begin to see a limited flow of non-Spanish European immigrants aftrer the opening of the Suez Canal (1869). This reduced the travel time between Europe and the Philippines by half. . Authorities in the Philippines saw the spread of these new ideas dangerous. The Philippines began opening more ports to internatunal trade (1873). By the end of the century Filipino exports were mostly agricultural. The top three exports were tobacco, abacá (Manila hemp), and sugar.

Sources

Eang, Cheong Weng. (1970). "Changing the Rules of the Game: The India-Manila Trade: 1785–1809) Journal of Southeast Asian Studies Vol. 1, No. 2 (1970), pp. 1–19.

Nadeau, Kathleen (April 3, 2020). "The Islands before Spanish Colonization (Pre-1521)" The History of the Philippines . The Greenwood Histories of the Modern Nations (2nd ed.). (Santa Barbara, California: Bloomsbury Publishing, 2020), pp. 23–24.

Schurz, William Lytle. The Manila Galleon (New York: E.P. Dutton, 1959).

Created: 12:48 PM 10/12/2025
Last updated: 12:48 PM 10/12/2025