Philippine Economy
Turn of the Century and the Era of Revolution
By Nick Joaquin

OMNIBUS was the arrival in Manila in 1765 of the ship Buen Consejo, only a couple of months after
it sailed from Spain. It had gone by way of the Cape of Good Hope
and the Indian Ocean, a route monopolized by the Portuguese
when it led to what they claimed was their half of the world.

Since the Borgia Pope, alejandro Sicto, divided the globe between
Spain and Portugal, the Spanish were barred from using this
eastward route around Africa to the Orient. So, an opposite "passage to India" had to be found.

The Philippines could be claimed for Spain's half of the globe because Magellan reached it by sailing
west. Which is why early documents refer to the Philippines as "the Isles of the West." And Manila
had to ship its goods across the Pacific to Mexico (though those goods were actually intended for
Europe) because the direct route to Spain via the Indian Ocean was taboo to the Manila Galleon.

But now here was the Buen Consejo as harbinger of - what? It had used the quicker direct route and
no one had barred it. (Portugal was a waning empire, its half of the world rent apart by the Dutch and
the British.) The merchants in Manila got goose flesh wondering if the Buen Consejo had brought ruin
to the Galleon Trade.

The voyage to Acapulco took as long as five months and was moreover very costly and risky. Would
the example of the Buen Consejo start a move to abolish the Manila-Acapulco galleon in favor of a
direct Manila-Seville trade? Unwilling to lose their galleon monopolies, the Manila merchants
campaigned for the retention of the Acapulco market. They did not know it but what they won was but
a reprieved. The Manila Galleon was doomed.

The Manila-Seville trade via the Cape of Good Hope was already in the works, bringing Europe closer
to Manila. By the reform spirit of two organizations founded in Manila in the 1780s was the breath of
Europe brought more quickly to our city.

The Economic Society of Friends of the Country (1781) was a project of the very progressive Governor
Jose Basco. He wanted the Philippines developed so fully as to become self-supporting.

The reform of Philippine trade, on the other hand, was the concern of the Royal Company of the
Philippines (1785), which wanted the trading accent transferred from Chinese goods to Philippine

Capitalized at eight million was subscribed by the King of Spain), the Royal Company had the
exclusive privilege of receiving in Manila, not only Chinese and Indian goods, but more importantly,
the Philippine products.

Another privilege was using the direct route to Europe in shipping its exports to Spain. Manila
exempted these exports to duties. At the other end, the Spanish port of Seville waived important
tariffs on all Philippine goods brought in by the Royal Company.

So, in the twilight decades of the 18th century, the Philippines was in direct contact with Europe and
was selling it more of Philippine produce than the Manila Galleon over carried. The Royal Company
was pledged to devote 40 percent of its net profits to agricultural research, technological innovation,
and community development.

Concentrating on agricultural reforms, the Economic Society of Friends of the Country had its ups
and downs but could at last point to a steady progression. It trained dyers, imported rice hulling
machines, subsidized a business newspaper and Father Blanco's Flora Filipina, gave the abaca
industry a steam help-making machine, helped establish a poppy culture and opium industry,
distributed plows, spades and other tools to needy farmers, awarded prices to model farms and
industries, issued manuals on indigo manufacture, sugar can culture, the usable clays in the Manila
area, etc. and pressed for the opening of the Iloilo, Sual and Zamboanga ports to international
commerce. The art school established by the society educated during its lifetime a total of 5, 485
students, among them was Juan Luna.

Neither the Royal Company nor the Economic Society quite fulfilled the hopes they raise but both
helped open up the Philippines to "modern" world emerging at the turn of the century -- the "dawn"
signified by the French Revolution and the Napoleonic wars.

In fact, this turn of the century saw the opening of Manila and the other native ports to foreign shipping
-- and the advent of foreign firms whose white sahibs were actually allowed to reside in Manila and
Cebu and Iloilo. These white-suited gentlemen were walking banks, financing various crop miracles,
above all the sugar boom.

In a way, we were experiencing another "invasion" by the whites. But at the same time, we were
advancing into white terrain. The priesthood had seemed territory closed to us, though both Madrid
and Rome have long been battling for the training of a native clergy.

However, the friars had experience of a native clergy too hastily ordained in the America and did not
want that failure repeated in the Philippines. But a certain historic exit hastened the confrontation
between the Indio secular priest and the white friar.

The same Governor Raon that saw the Buen Consejo decking in 1765 saw another ship arriving in
1768 with equally epochal news. The king of Spain was ordering the expulsion of the Jesuits from the
Philippines and all is other dominions.

One charge against the Jesuits was treason: "The ellicit communication of their provincial with the
English commander during the (British) occupation of Manila." But what really ruled the king of Spain
and the other absolute monarchs of Europe, especiallly the Bourbons, was the way the Jesuits
upheld the supremacy of papal power.

The story is that, when Governor Raon received the order of expulsion, he decided to make a profit on
it. He is said to have contacted the Jesuits secretly and, in exchange for a large sum of money, to
have shown them the king's order.

At that time, the Jesuits had two schools (Colegio de San Jose and Colegio de San Ignacio) in
Manila; another college in Cavite; a school and seminary in San Pedro, Makati; and 130 missions in
the provinces. Their motherhouse in Intramuros stood beside the Puerta Real.

Instead of raiding this motherhouse at once, Raon tarried some five days, thus giving the Jesuits
ample tie to spirit away their treasures and burn their papers. The kings's order was carried out in
mid-May 1768 and two months later Raon was writing the king that the first batch of Jesuits
deportees, 64 of them, was being shipped out on the San Carlos Borromeo.

The governor' duplicity was, however, so noised about that at the end of his term he was subjected to
a probe, during which he died.

The expulsion of the Jesuits led to a church crisis, because there were not enough priests to take
over the parishes left vacant. The archbishop of Manila then was Basilio Santa Justa y Sancho, who
now saw a chance to push his favorite project: the creation of a native secular clergy to replace the
friars in regions already fully Christianized. The friars were supposed to work as missionaries only in
areas still largely pagan.

The shortage of priests after the Jesuits departure prompted Archbishop Sancho to ordain all the
native candidates he could find. A joe that became current was that no more peons to man the
galleys could be found because Sancho had turned them all into priests. Many of them disgraced the
cloth with their ignorance, bad manners, sloth drunkenness and other vices.but not all the jokles and
gripes about them could stop the rise of a native clergy. In 1773, the Sea of Manila opened a new
seminary for native boys aspiring to the cloth. The Seminario de San Carlos occupied the splendid
hall in Intramuros that had been the Jesuit residence.

The emergence from the Indio of the Filipino can be explained by Philippine progress during the latter
half of the 18th century. As already noted, the mastering of new tools freed the greater mass of the
people from food production and made possible intellectual and artistic pursuits. Direct contact with
Europe brought over the ideas of the Enlightenment (the libertarian propaganda by European
ilustrados) and of the French Revolution (1789). Most influential of all was the libertarian movement
right here in Manila of an ilustrado group that may be called the First Propaganda.

These ilustrados were Creole: meaning they were Spanish but born in the Philippines. The Creole
were the first to style themselves -- and to be referred to -- as "Filipinos." As early as the 16th
century, it had been noted that Spaniard who came to the Philippines generally died young -- they
were defeated by the climate -- and left little family. Conquistador Intramuros registered a very low
birth rate.

The Creole was thus a weak strain much disdained by the Peninsular. But in the last decade of the
18th century there was a sudden flowering of the Philippine Creole. This was exemplified by such
writers as Manuel Zumalde, Jose Javier de Torres, Pedro Pelaez and Luis Rodriguez Varela. All these
were influenced by the Englightenment: they advocated not revoldt but reform. But the reforms they
demanded were revolutionary: Filipinization of the parishes; ouster of the friars; representation in the
Cortes (the Spanish parliament); and the founding of a representative government.

Luis Rodriguez Varela especially, who styled himself El Conde Filipino (or the Count of the
Philippines), can most truly be called the precursor of Philippine nationalism. Rodriguez Varela was
the first to call himself a Filipino -- and in print yet! -- and the first to use that term in a nationalistic

The result of all this was a new swagger in the Manileņo. Foreigners who came to thecity at the turn
of the century noticed that Manila could pride itself in a style -- strutted by both dress andm anner --
that was not European, nor Mexican, nor Chinese, nor even Indio. It was quite simply Filipino.

The Filipino began a-borning when the Creole pronounced himself the equal of the Peninsular. But the
Manileņo had long assumed that particular status.

Because the Portuguese, the Moros, the Elizabethan pirates, the Hollanders and the Imperial British
were stopped in Manila Bay, Manila could meet the 19th century with -- aplomb?

Back to Kabayan
Main Page


Philippine Economy
Turn of the Century

By Nick Joaquin

Era of Revolution
Openings and Closings

LAST of the Manila Galleons sailed for Acapulco in 1811. Four years later, Manila welcomed with
feast and frolic the last galleon returning from America. Thus ended the three gaudy centuries of the
Galleon Trade.

In 1821, came another closing that could have been an opening for us. Mexico declared its
independence. Since we were then a part of Mexico, we too should have been considered as liberated
from Spanish rule. And indeed the Mexicans bade us join them in breaking free. If the top Philippine
officials of Church and State had opened to follow Mexico out of the empire, the Philippines would
have been a sovereign state in 1821.

Unfortunately, our head of state at that time was Mariano Fernandez de Folgueras, twice an interim
governor, and a fervent loyalist. He as definitely for keeping the Philippines within the empire -- and he
will prevailed, although it can be assumed that the Philippine Creoles, insurgent since the 1790s,
would have opted for independence. But they staged their uprisings only afterwards.

To do them justice, it should be admitted that the start of the 19th century tantalized by seeming to
offer openings, reforms, even freedom, without recourse to revolt. The Philippines was granted
representation in the Spanish Cortes, or parliament, and the Creoles felt exalted because inevitably,
they were tapped to represent the Philippines in Madrid. But a sudden serve in politics and our seats
in the Cortes evaporated.

We were proclaimed an autonomous state, one of the united states of Spain, and we rejoiced. We
thought it meant no longer having to pay tribute or do forced labor. But another political swerve and we
found we were still just a colony, still bound to tribute and forced labor.

Shifts like these were caused by the tug-of-war in Madrid between reformists and reactionaries. If the
liberals were in power there, we got reformers here. If the conservatives overpowered the Madrid
government, the Manila government was overpowered by the clerical party.

Suffering most keenly from those shifts were the Philippine Creoles. Barred from agriculture and the
proletarian occupations, they had open before them only the civil service, the Church, and military
service. Military service was their most prized sinecure - and now they found that office being taken
away from them. Perhaps, the fact that Creoles engineered the revolutions in America had taught
Madrid a lesson: the Philippine Creoles too could be a danger and therefore should not be trusted;
they should not continue to control the military. Madrid ruled that an officer commissioned in Spain
outranked officers of equal rank (or even higher) who were commissioned in the Philippines.

In short, the Creole, meaning the Philippine-born, was inferior to the Peninsular, or Spanish-born.

This insult was to make the first half of the 19th century as revolutionary as the 1890s. The Philippine
Creoles in revolt. They were fighting a war of independence. They wanted the Peninsulars out. They
wanted themselves in power: as heads of state; as commanders of the armed forces; as heads of the
Church in the Philippines. It was mostly a cold war that the Creoles waged. They lost it because the
leaders they produced - Varela the Conde Filipino, Pelaez the almost-an-archbishop, the Pardo de
Taveras and the Zobels and the Regidors, and even Burgos - were of divided loyalties. They could not
decide if they were Filipino or Spanish. The Conde Filipino recanted his nationalist ideas when he fell
into the hands of the law.

In October 1822, the arrival of a new governor, Juan Antonio Martinez, electrified Manila, because with
him came a corps of military officers, all Peninsulars, who were to replace the Creoles in the army.
When the Creole officers protested, Governor Martinez had their ringleaders arrested (Varela the
Conde Filipino was among them) and exiled.

The mutinous movement was not quelled. A new rebel leader arose: Captain Novales, a Philippine
Creole with Mexican blood. To get rid of him, the army sent him to fight the pirates in Mindanao.
Novales sneaked back to Manila in June 1823, assembled 800 malcontents, raised the cry of revolt,
and proclaimed himself "Emperor of the Philippines." Manila was jolted awake at midnight by the
cries of Viva la independencia! and Viva el Emperador Novales!

The rebels seized the cathedral, the infantry barracks, and the City Hall, where they locked up the
military officers they had captured. At the governor's palace was no governor; Juan Antonio Martinez
had gone to the countryside for some cool air. But the rebels came upon Mariano Folgueras, the
former interium governor, and they killed him. It was Folguera who had urged Madrid to replace the
Creole officers in the Philippines with Peninsulars.

At dawn, Novales marched on Fort Santiago, where his brother Antonio was in command but Antonio
Novales refused to open the first to his "emperor" brother. When Governor Martinez learned that the
Fort was holding out, he rushed troops into Intramuros to corner the rebels, who quickly dispersed.
Novales was found hiding under the drawbridge of the Puerta Real.

Incredibly, the governor ordered the immediate execution not only of Novales but also of his brother
Antonio, whose loyalty had saved the government. At the last minute, however, the governor was
forced by public fury to snatch Antonio from the firing squad and release him. Poor Antonio went mad
from the ordeal.

Of Andres Novales, it is said that he was proclaimed emperor at midnight and was executed the
following afternoon as a traitor. But that long day could have been the last of the empire in the
Philippines, if Fort Santiago had only yielded. It was noticed during the uprising that the public
cheered and waved from windows as the rebel troops marched past.

Madrid played deaf and blind to this growing disaffection in the colony, which worsened in 1828 when
not only the military commands but also the provincial governorships were removed from the Creoles
and given over to the Peninsulares. The result was another Creole plot to seize the government.

This plot, which became known as the Palmero Conspiracy, involved personages from both the
military and the civil service as welll as the Palmero brothers, scions of a Philippine clan whose most
eminent descendant was Marcelo Azcarraga, Prime Minister of Spain in the 1890s. (Old Manila's
Calle Azcarraga was named after him.) So eminent, in fact, were the Palmeros that their fellow
conspirators that the government, when it discovered the cabal, thought it was wiser not to publicize
it, lest the word spread that the Spanish bigwigs were themselves wanting Spain kicked out of the
Philippines. Suppressed information has made the Palmero Conspiracy one of the mysteries in our
annals. The masterminds were exiled to the Peninsula. If more and more Filipinos were being exiled
to Spain, more and more Spaniards, also disaffected of temper, were being exiled to the Philippines
and circulating here their radical ideas. And those ideas were not picked up by the Creoles alone.

Our historians today tend to dismiss the Creole insurrection of the first half of the 19th century as
merely a war between two kinds of Spaniard.

Actually it was a nationalist struggle. In fact, the rallying cry of the Creoles --- "sons of the Country!" -
was to be picked up by the Katipunan and translated as "Anak ng Bayan."

With their nationalist cry, the Creoles pushed the idea that natives of the country should have prior
claims to it and not foreigners. "Hijos del Pais" meant "Filipino First." Of course the Creoles were
thinking only of themselves - but by enunciating the idea, they made it universal.

That enunciation made the "Indio" see himself as Filipino.
Creole insurgency was the necessary preface to the Philippine Revolution.