An excellent code of laws, called the Leyes de Indias, in force in Mexico, was adopted here, but modifications in harmony with the special conditions of this colony were urgently necessary, while all the branches of government called for reorganization or reform. Under these circumstances, the bishop of Manila, Domingo Salazar, took the initiative in commissioning a priest, Fray Alonso Sanchez, to repair first to the viceroy of Mexico and afterward to the King of Spain, to expose the grievances of his party.

Alonso Sanchez left the Philippines with his appointment as procurator-general for the Augustine order of monks. As the execution of the proposed reforms, which he was charged to lay before his majesty, would, if conceded, be intrusted to the government of Mexico, his first care was to seek the partisanship of the viceroy of that colony; and in this he succeeded. Thence he continued his journey to Seville, where the court happened to be, arriving there in September, 1587. He was at once granted an audience by the king, to present his credentials and memorials relative to Philippine affairs in general; and ecclesiastical judicial, military and native matters in particular. The king promised to peruse all the documents, but suffering from gout, and having so many and distinct State concerns to attend to, the negotiations were greatly delayed. Finally, Sanchez sought a minister who had easy access to the royal apartments, and this personage obtained from the king permission to examine the documents and hand to him a succinct resumé of the whole for his majesty’s consideration. A commission was then appointed, including Sanchez, and the deliberations lasted five months.

At this period, public opinion in the Spanish universities was very divided with respect to Catholic missions in the Indies.

Some maintained that the propaganda of the faith ought to be purely Apostolic, such as Jesus Christ taught to his disciples, inculcating doctrines of humility and poverty without arms or violence, and if, nevertheless, the heathens refused to welcome this mission of peace, the missionaries should simply abandon them in silence without further demonstration than that of shaking the dust off their feet.

Others opined, and among them was Sanchez, that such a method was useless and impracticable, and that it was justifiable to force their religion upon primitive races at the point of the sword if necessary, using any violence to enforce its acceptance.

Much ill-feeling was aroused in the discussion of these two and distinct theories. Juan Volante, a Dominican friar of the Convent of Our Lady of Atocha, presented a petition against the views of the Sanchez faction, declaring that the idea of ingrafting religion with the aid of arms was scandalous. Fray Juan Volante was so importunate, that he had to be heard in council, but neither party yielded. At length, the intervention of the bishops of Manila, Macao and Malacca and several captains and governors in the Indies influenced the king to put an end to the controversy, on the ground that it would lead to no good.

The king retired to the Monastery of the Escorial, and Sanchez was cited to meet him there to learn the royal will. About the same time the news reached the king of the loss of the so-called Invincible Armada, sent under the command of the incompetent Duke of Medina Sidonia to annex England. Notwithstanding this severe blow to the vain ambition of Philip, the affairs of the Philippines were delayed but a short time. On the basis of the recommendation of the junta, the royal assent was given to an important decree, of which the most significant articles are the following, namely:—The tribute was fixed by the king at ten reales per annum, payable by the natives in gold, silver, or grain, or part in one commodity and part in the other. Of this tribute, eight reales were to be paid to the treasury, one half real to the bishop and clergy, and one real and a half to be applied to the maintenance of the soldiery. Full tribute was not to be exacted from the natives still unsubjected to the crown. Until their confidence and loyalty should be gained by friendly overtures, they were to pay a small recognition of vassalage, and subsequently the tribute in common with the rest.

Instead of one-fifth value of gold and hidden treasure due to his majesty (real quinto), he would henceforth receive only one-tenth of such value, excepting that of gold, which the natives would be permitted to extract free of rebate.

A customs duty of 3 per cent ad valorem was to be paid on merchandise sold, and this duty was to be spent on the army.

Export duty was to be paid on goods shipped to New Spain (Mexico), and this impost was also to be exclusively spent on the armed forces.