The secession of Mexico from the Spanish Crown in the second decade of last century brought with it a complete revolution in Philippine affairs. Direct trade with Europe through one channel or another had necessarily to be permitted. The “Situado,” or subsidy (vide p. [244]), received from Mexico became a thing of the past, and necessity urged the home authorities to relax, to a certain extent, the old restraint on the development of Philippine resources.
In 1839 the first Philippine Budget was presented in the Spanish Córtes, but so little interest did the affairs of the Colony excite that it provoked no discussion. After the amendment of only one item the Budget was adopted in silence. It was not the practice in the earliest years to publish the full Philippine Budget in the Islands, although allusion was necessarily made to items of it in the Gaceta de Manila. However, it could be seen without difficulty in Madrid. Considering that the Filipinos had no political rights, except for the very brief period alluded to in Chapter [xxii]. (vide Córtes de Cádiz), it is evident that popular discussion of public finance would have been undesirable, because it could have led to no practical issue.
There is apparently no record of the Philippine Islands having been at any time in a flourishing financial condition. With few exceptions, in latter years the collected revenue of the Colony was usually much less than the estimated yield of taxes. The Budget for 1888 is here given in detail as an example.
Philippine Budgets
| Financial Year. | Estimated Income. | Income Realized. | Difference. |
| ₱ | ₱ | ₱ | |
| 1884–85 | 11,298,508.98 | 9,893,745.87 | 1,404,763.11 |
| 1885–86 | 11,528,178.00 | 9,688,029.70 | 1,840,148.30 |
| 1886–87 | 11,554,379.00 | 9,324,974.08 | 2,229,404.92 |
| 1894–95 | 13,280,139.40 | 13,579,900.00 | 299,760.60 |
| 1896–97 | 17,086,423.00 | 17,474,000.00 | 387,577.00 |
Anticipated Revenue, Year 1888
| ₱ cts. | |
| Direct Taxes | 5,206,836 93 |
| Customs Dues | 2,023,400 00 |
| Government Monopolies (stamps, cock-fighting, opium, gambling, etc.) | 1,181,239 00 |
| Lotteries and Raffles | 513,200 00 |
| Sale of State property | 153,571 00 |
| War and Marine Department (sale of useless articles. Gain on repairs to private ships in the Government Arsenal) | 15,150 00 |
| Sundries | 744,500 00 |
| 9,837,896 93 | |
| Anticipated Expenditure, year 1888 | 9,825,633 29 |
| Anticipated Surplus | ₱ 12,263 64 |
The actual deficit in the last previous Budget for which there was no provision was estimated at ₱1,376,179.56, against which the above balance would be placed. There were some remarkable inconsistencies in the 1888 Budget. The Inspection of Woods and Forests was an institution under a Chief Inspector with a salary of ₱6,500, assisted by a technical staff of 64 persons and 52 non-technical subordinates. The total cost for the year was estimated at ₱165,960, against which the expected income derived from duties on felled timber was ₱80,000; hence a loss of ₱85,960 was duly anticipated to satisfy office-seekers. Those who wished to cut timber were subjected to very complicated and vexatious regulations. The tariff of duties and mode of calculating it were capriciously modified from time to time on no commercial basis whatever. Merchants who had contracted to supply timber at so much per foot for delivery within a fixed period were never sure of their profits; for the dues might, meanwhile, be raised without any consideration for trading interests. The most urgent material want of the Colony was easy means of communication with the interior of the Islands. Yet, whilst this was so sadly neglected, the Budget provided the sum of ₱113,686.64 for a School of Agriculture in Manila and 10 model farms and Schools of Cultivation in the provinces. It was not the want of farming knowledge, but the scarcity of capital and the scandalous neglect of public highways and bridges for transport of produce which retarded agriculture. The 113,000 pesos, if disbursed on roads, bridges, town halls, and landing-jetties, would have benefited the Colony; as it was, this sum went to furnish salaries to needy Spaniards.
The following are some of the most interesting items of the Budget: