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Philippines Trade with Europe and America
As long as the Spanish empire on the eastern rim of the
Pacific remained intact and the galleons sailed to and from
Acapulco, there was little incentive on the part of colonial
authorities to promote the development of the Philippines,
despite the initiatives of José Basco y Vargas during his career
as governor in Manila. After his departure, the Economic Society
was allowed to fall on hard times, and the Royal Company showed
decreasing profits. The independence of Spain's Latin American
colonies, particularly Mexico in 1821, forced a fundamental
reorientation of policy. Cut off from the Mexican subsidies and
protected Latin American markets, the islands had to pay for
themselves. As a result, in the late eighteenth century
commercial isolation became less feasible.
Growing numbers of foreign merchants in Manila spurred the
integration of the Philippines into an international commercial
system linking industrialized Europe and North America with
sources of raw materials and markets in the Americas and Asia. In
principle, non-Spanish Europeans were not allowed to reside in
Manila or elsewhere in the islands, but in fact British,
American, French, and other foreign merchants circumvented this
prohibition by flying the flags of Asian states or conniving with
local officials. In 1834 the crown abolished the Royal Company of
the Philippines and formally recognized free trade, opening the
port of Manila to unrestricted foreign commerce.
By 1856 there were thirteen foreign trading firms in Manila,
of which seven were British and two American; between 1855 and
1873 the Spanish opened new ports to foreign trade, including
Iloilo on Panay, Zamboanga in the western portion of Mindanao,
Cebu on Cebu, and Legaspi in the Bicol area of southern Luzon.
The growing prominence of steam over sail navigation and the
opening of the Suez Canal in 1869 contributed to spectacular
increases in the volume of trade. In 1851 exports and imports
totaled some US$8.2 million; ten years later, they had risen to
US$18.9 million and by 1870 were US$53.3 million. Exports alone
grew by US$20 million between 1861 and 1870. British and United
States merchants dominated Philippine commerce, the former in an
especially favored position because of their bases in Singapore,
Hong Kong, and the island of Borneo.
By the late nineteenth century, three crops--tobacco, abaca,
and sugar--dominated Philippine exports. The government monopoly
on tobacco had been abolished in 1880, but Philippine cigars
maintained their high reputation, popular throughout Victorian
parlors in Britain, the European continent, and North America.
Because of the growth of worldwide shipping, Philippine abaca,
which was considered the best material for ropes and cordage,
grew in importance and after 1850 alternated with sugar as the
islands' most important export. Americans dominated the abaca
trade; raw material was made into rope, first at plants in New
England and then in the Philippines. Principal regions for the
growing of abaca were the Bicol areas of southeastern Luzon and
the eastern portions of the Visayan Islands.
Sugarcane had been produced and refined using crude methods
at least as early as the beginning of the eighteenth century. The
opening of the port of Iloilo on Panay in 1855 and the
encouragement of the British vice consul in that town, Nicholas
Loney (described by a modern writer as "a one-man whirlwind of
entrepreneurial and technical innovation"), led to the
development of the previously unsettled island of Negros as the
center of the Philippine sugar industry, exporting its product to
Britain and Australia. Loney arranged liberal credit terms for
local landlords to invest in the new crop, encouraged the
migration of labor from the neighboring and overpopulated island
of Panay, and introduced stream-driven sugar refineries that
replaced the traditional method of producing low-grade sugar in
loaves. The population of Negros tripled. Local "sugar barons"---
the owners of the sugar plantations--became a potent political
and economic force by the end of the nineteenth century.
Data as of June 1991
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