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The Economic Aspect of the Philippines in the 19th Century
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The Economic Aspect of the Philippines in the 19th Century
The Galleon Trade Effects
THE GALLEON TRADE
- lasted from 1565 - 1815
- Fray Andres de Urdaneta, a well known circumnavigator, is the person who was able to discover the route from the Philippines to Mexico.
What is the Galleon Trade?
- It made the Philippines a trading hub for other China, Japan, India, and the rest of SEA.
- They used huge ships called Galleons, previously used for war.
- They sent their goods here to be shipped to Acapulo which is a city found in Mexico
- 90% of goods from Mexico which were bound for China were silver. During their time a piece of gold was worth 8 pieces of silver. However, in Europe, a piece of gold was worth 13 pieces of silver.
- Every indio was forced to work to keep the ships maintained as long as they were of working age which was 18-60
- They treated them badly by underpaying them to increase their income between the trade they initiated between Manila and Acapulo
- The woodcutters work from 4 in the morning to 8 at night. They were not given time to rest or eat
- 4 reals only per month. 40 is needed to keep a person healthy or at least alive
Common Products
Positive Effects of Ending the Galleon Trade
Positive Effects of Ending the Trade
- It made our agricultural industry boom
- Rice production increased by a lot
> 1841: they were able to export 9900 francs (french currency) worth of rice
> 1842: 356,000 worth
> 1886-1890: Rice imports averaged at 157,332,654 lbs. at 1,836,000 US dollars
- Sugar was another main product made by Filipinos
> Several plantations were opened in Antique, Iloilo, Negros being the center of sugarcane production in the country
Mexico as a World City
- It gave Mexico an Asian extension to garner resources and funds.
- Founders of California are of Filipino Descent
- Asian imports to server their economy
1565 - 1815
MONOPOLIES
MONOPOLIES
1781 - 1881
The Galleon Trade
- Every indio was forced to work to keep the ships maintained as long as they were of working age which was 18-60
- They treated them badly by underpaying them to increase their income between the trade they initiated between Manila and Acapulo
- 4 reals only per month. 40 is needed to keep a person healthy or at least alive
- Spanish closed all Manila ports to all countries except Mexico
- two galleons used
> Acapulco-Manila: 500,000 pesos worth (120 days)
> Manila-Acapulco: 250,000 pesos worth (90 days)
The Tobacco Monopoly
The Tobacco Monopoly
- The Galleon Trade vs. Philippines' agricultural industry
- dependence on royal situado
- Governor General José Basco y Vargas > monopoly’s successful establishment
> Cultuur-stelsel by the Dutch on Java
How the monopoly started
How the monopoly started
- Vargas sought financial independence from vice-royalty
- Cagayan Valley, Ilocos Norte, Ilocos Sur, La Union, Isabela, Abra, Nueva Ecija and Marinduque
- sold at pre-designated price, leaving little for farmers
- exported to other countries and to cigarette factories in Manila
General overview
- domestic trade vs. export market
- Gapan, Nueva Ecija - primary source of tobacco stock
- other stocks from harvests in the Visayas or by pagan tribes in the mountains of northern Luzon
General overview
[cont.]
- overproduction was greater concern
- Cagayan instead of Gapan as main source after 1830
- government started to aim for production expansion after increase in tobacco demand abroad
- by 1840's, tobacco became the second most sought after export product after sugar
Nature of the monopoly
- successful fiscal measure
- exploited a native vice and was more of a sumptuary tax
- special symbolic value of monopoly to Spaniards: one industry they completely dominated
- tool for exploitation
- surpluses went to Spain, leaving foreign merchants with little to no stocks left to pay for
Cagayan Valley
Government administration of the tobacco monopoly in the region underwent four phases
Significance of the Cagayan Valley
PHASE 1
- 1787 - 1800
tobacco cultivation was banned by the government, with security being the main concern
- late 1790's
certain towns were allowed to grow tobacco after persistent complaints about the ban ruining the province
PHASE 2
- 1800 - 1830
tobacco cultivation became general in the province
increase in deliveries from Cagayan attracted the government’s attention
PHASE 2
PHASE 3
- 1830 - 1863
period of relative prosperity after reforms were drafted for Cagayan
PHASE 3
PHASE 4
- use of papeletas to pay farmers
- 1863 - 1881
miserable conditions surfaced
PHASE 4
Effects
Effects
- reinforced native resistance to a government policy
- set population movement patterns
> emigration from province due to the monopoly in late 18th century
> Ilocano immigration to province due to increase in need for tobacco farmers around 1850s
Cause of Cash Crop Economy
- Involvement of the galleon trade
- Abolition of the trade cause by the revolutionary line (1815)
CASH CROP ECONOMY
- Liberalization of the Philippine foreign commerce
- At the start, only some Asian and European countries were permitted to trade with the Philippines using their own flags and bottoms.
- In 1834, the Philippines was officially opened to world commerce.
- American and European merchants brought products of the Industrial Revolution to the Philippines.
Cash Crop Economy and its Beginnings
Beginnings
- Cultivation of crops
- The colonial government propped up the economy with the cash crop system
> Ports
> Shipyards
> Telegraphic lines in visayas and mindanao
> Railways
> Wharves, lighthouses and bridges
Scientific Farming
- The rise in crop cultivation made way for the development of scientific farming.
Scientific Farming
- Real Sociedad Economica de Amigos del Pais (1781)
- The Society encouraged the development of agriculture by offering prizes to those who excelled in the cultivation of cotton, spices, sugar and silk.
Evolution of the Cash Crop Economy
Evolution
- Entire regions were planted to various crops, and these crops were exported to Europe and America
> Sugar
> Hemp
> Tobacco
> Coconut oil
> Coffee
> Rice
- Benefits of cultivating crops became more known
- Spaniards took advantage of the Philippines’ cash crop
> They familiarized themselves to the natural resources of the Philippines and realized that there was money to earn outside the usual tax collections
Cash Crop Beneficiaries
- European and American commercial companies - buyers
- Spanish businessmen - shipping
- Religious orders - cash crop gained their interests
- Foreign merchants
- Spanish and Chinese mestizos transporters
Effect on the Filipinos
Effects
- The indios remained poor
- Cash crop economy created a native servile class
- Basically, cash crop did not benefit most Filipinos
- Cash crop increased the parishes and towns of Cebu from 12 to 50
- It helped develop Cebu
- The influential and wealthy Mestizos farmed out idle lands before the 19th century
> It gave them sugar, tobacco, and corn throughout the island of Cebu
Effect of Cash Crop on Cebu
Overall Effect on the Philippines
Overall Effect on the Philippines
- Philippines became a major exporter after opening to world trade
- Huge parts of land were used to make and sell cash crop
- Land became primary source of wealth
- Technological interconnections among the Philippines
> Railroads
> Steam ships
OPENING OF PORTS
Opening of Ports to International Trade
Real Compañía de Filipinas (The Royal Company of the Philippines)
- was established through a royal decree in 1781
- to establish commercial relations among the different colonies, and also between the colonies of Spain
- to supply Manila with the products of Europe, and, in return, to carry to Spain the products of the Philippines
Opening of Ports to International Trade
Opening of the Ports
- bankruptcy of the Royal Company of the Philippines
- Governor-General Félix Berenguer de Marquina recommended that the King of Spain open Manila to world commerce
- Royal Company of the Philippines was abolished
- The Port of Manila was opened in 1835
The Port of Manila
- the ports in Iloilo, Zamboanga and Pangasinan opened 20 years later
Opening of Ports to International Trade
Effects of the Opening of Ports to International Trade
- economy of the Philippines rose rapidly
> export of agriculture increased
> shops owned by Filipino businessmen increased
> people grew rich from profit and trade
- a new class emerged: The Filipino Middle Class
> people who participated in economic activities when the Philippines opened to international trade
> were able to send their children to study abroad
- liberal ideas of Europe and America influenced the Filipinos
> liberal ideas were brought from foreign traders and from Filipinos who came back from their study abroad
> learned about freedom of speech and freedom of the press
> Ilustrados - educated class who were exposed to liberal ideas
(Ilustrados)
What is the Suez Canal?
OPENING OF THE SUEZ CANAL
- a waterway, opened in 1869, connecting the Mediterranean and the Red Sea, providing the shortest maritime route from Europe to the Pacific and Indian Ocean (Britannica)
- became one of the most heavily used shipping lanes
(Picture of the Suez)
Effects on Travel
Effects on Travel
- Decreased travel time between Europe and the Philippines from 3 to 1 month (Legarda)
- Direct steamship service to spain by 1873
Effects on Import and Export
1) Rice was not considered as an article of export (Plehn)
a) Rice Fields were used for other products
b) Rice was instead imported from French-China, generally from the port of Saigon
[cont.]
2) Sugar, fibers, and coffee became the main exports. (Legarda)
a) “saltatory rise in the level of foreign trade”
b) The colonial powers pressured Filipinos to produce more ‘goods for export and to develop plantation agriculture
i) Introduced agricultural machinery to the people
(19th Century Farmers)
[cont.]
3) There was also an increase of commodity concentration of exports to other countries (Legarda)
a) For goods such as sugar, abaca, tobacco, and coffee
b) Some of the countries mentioned were United Kingdom, China, and the United States
4) Textiles also dominated imports, although with the decline of local manufacturing (Legarda)
a) With the increase of importing and exporting local weavers had a tough time competing
(an example of 19th Century Textile)