We need not trace the history of early civilizations to show the influence exerted by physical factors. We need only to recall the motives, familiar to all, which led to the discovery of America, namely, the closing of the trade routes to the East through the conquest of the Turks. And the history of this country itself furnishes many illustrations. Both ancient and modern writers have had a good deal to say about the strategic position of the Philippine Islands in relation to the countries bordering around the Pacific Ocean.[4] It was that central geographical position which explained the marked predominance of Manila as a trade depot over all the other ports in the Orient, at one time in our history. That was, furthermore, the reason why the Spaniards kept the country; they wanted to use it “as a means to be nearer, and to reach more quickly, the rich country of spices, and then the continent of Asia, Japan, and the Orient in general.”[5]

Finally, we should distinguish the various causes that explain historical events. For example, a good deal of what has been known as the religious question in this country, is not concerned with religion at all, but chiefly with economics. It is not always easy to distinguish these various causes; a fact which only goes to explain the one-sided point of view which has prevailed till the present. But, that the questions connected with the means of getting a living were considered paramount, even long before the formal exposition of the economic interpretation of history, may be seen from the words of the provincials of the religious orders in a remonstrance addressed to the governor and captain-general of the Philippines, wherein they depicted the deplorable conditions in the Islands:

“Third, all the Christian Indians would be more steadfast and rooted in the holy faith, and would become effective and most suitable instruments for (gaining) new conversions of infidels (and) apostates, the infidels themselves beholding the abundant wealth and profit, and other benefits, of the Christian Indians; FOR IT IS THE TEMPORAL WELFARE EVIDENT TO THEIR SENSES WHICH, AS EXPERIENCE TEACHES US, STRONGLY INFLUENCES BOTH CLASSES OF INDIANS, TO BE CONVERTED OR TO MAINTAIN THEMSELVES IN THE CHRISTIAN FAITH.”[6]

Divisions of present work.

The present work is built around a group of ideas briefly summarized as follows: The first three chapters portray the industries and commerce at the time of the coming of the Spaniards; and explain the causes that led to their decline; the fourth chapter dwells upon the era of restriction, and the Manila-Acapulco trade, which, for over two centuries, dominated this country, and has had such depressing effect upon economic growth; the last chapter takes up the era of liberalism, during the nineteenth century, and shows how the opening of the Philippines to foreign influence resulted in the development of its natural resources. Any attempt to trace Philippine economic development in the past three centuries must necessarily start, not so much with a detailed account of how the industries developed as with an exposition of how they were not developed. On the other hand, the remarkable social progress of the last half of the nineteenth century, following the opening of the markets of the world to Philippine products, is an encouraging indication of probable social advance yet to be attained.


[1] “This modest work, which does not pretend to be without mistakes, and perhaps other flaws, has a special interest in that it treats of a matter about which the historians of those islands had hardly occupied themselves. The chronicles written by the laborious ecclesiastics, the only books of history which may be consulted about the Philippines, contain nothing but descriptions of the campaigns against the Dutch, the wars against the infidels—in the Archipelago as well as on the continent of Asia—the rebellions of the natives in some provinces, so easily suppressed, the bloody encounters with the Chinese settled in the islands, portentous miracles, progress of the missions in China, Annam and Japan, famous conflicts between the ecclesiastical jurisdiction and the civil power represented by the Governor General and the Real Acuerdo, great crimes, other notable events of different kinds and changes in the personnel and form of administration of the country.

“But in all these works, though useful and important, there is observed, among others, the absence of antecedents relative to economic and mercantile legislation, the scarcity of data to show the development of wealth of the country and of its commercial movement, the lack of a critical analysis of the legal provisions concerning such activities, and of their influence on the decadence or progress of production and commerce.” (Manuel Azcarraga y Palmero, Gobernador civil cesante de Manila, Alcalde mayor que ha sido de Cagayan y de Bulacan, Auditor honorario de Marina, etc., La Libertad de Comercio en las Islas Filipinas.—Madrid, 1872, pp. 9–10.)

[2] “ * * * The result is that Spanish writers, with them the Filipinos, and to a great extent the writers of Philippine treatises in other languages (drawing hastily upon Spanish sources), have over emphasized the political history of this Philippine record. Of course, in Spain and the Spanish countries long-standing habit makes it the tendency to look to government for everything, and to think of all amelioration of evils and all incitements to progress as coming from above; while social and economic conditions in the Philippines are such as to emphasize this tendency, the aristocracy of wealth and education standing apart from the masses and being, to the latter, identified in the main with the government, with the “powers above.” Nevertheless, it is to be insisted that social and economic progress in the Philippines during the last half-century should be considered separately and studied more practically than they have been thus far.” (Le Roy’s Bibliographical Notes.—Bl. and Rb., Vol. 52, 134.)