History of Port of Manila

By the middle of the 19th Century, the Port of Manila was opened to trade with all foreign ports. In the
late 19th Century, the Port of Manila became a hotbed of anti-Spanish sentiment and propaganda. In
1886 a novel by Jose Rizal planted the seeds of revolution. Although the author was exiled to Dapitan ,
organizations were formed with the goal of ending Spanish rule. Open rebellion broke out in 1896. Rizal
was made a martyr to the revolution when the Spanish executed him by firing squad. After months of
fighting, a revolutionary government was formed, but it did not survive.

During the Spanish-American War and the Philippine-American War , troops from the United States
invaded the Port of Manila in 1898. Spain was defeated, and the United States took control of the Port
of Manila and the Philippine islands in a brutal assault. Under Admiral George Dewey , the American
Navy defeated the Spanish in the Battle of Manila Bay. Spain transferred the islands and the Port of
Manila to the United States in the 1898 Treaty of Paris , ending over three centuries of Spanish rule.

The Filipinos did not want to accept rule by the United States, having just won independence from
Spain. Emilio Aguinaldo declared the First Philippine Republic , but the United States did not recognize
the new republic. War broke out in 1899 between the Filipinos and the Americans.

After the Galleons: Foreign Trade, Economic Change and Entrepreneurship in the Nineteenth-Century
Philippines

The decades from 1820 to 1870 were crucial in the economic history of the world and produced
significant changes in the economy of the country. An increase in trade and navigation in Asia
accompanied the opening of the Suez Canal. Goods like sugar, fibers, coffee, etc. became the main
export commodities. The Spanish government granted shipping subsidies. As a result of all of this, in the
Philippines there was “a saltatory rise in the level of foreign trade” (p. 179). These events and trends
were common to the Southeast Asian transformations from subsistence to export economies. However,
the trajectory followed by the Islands was different from the Southeast Asian path. The economies of
the region’s colonial powers tried to increase agricultural output pressuring the peasants to produce
more goods for export and to develop plantation agriculture. According to Legarda in the period
between 1820 and 1870: “Neither pressure on the peasantry nor the development of large-scale
plantation agriculture was primarily responsible for transforming the Philippines from a subsistence to
an export economy” (p. 186). Such a role was played by foreign businesses — “they formed the main
nexus between the Philippine economy and the currents of world trade” (p. 211). The foreign merchants
introduced agricultural machinery, advanced money on crops which stimulated the opening of new
agricultural areas and consequently exports grew. There was an increasing commodity concentration of
exports (sugar, abaca, tobacco and coffee) to the United Kingdom, China, British East Indies, United
States and Spain [Tables 1 to 5]. Textiles dominated imports accompanied by a decline of local
manufacturing and in 1870 rice became an import commodity. “Both trends had significant social and
demographic repercussions” (p. 178) [Tables 6 to 13].
British and Americans were predominant in the foreign trade. The Chinese occupied the position of
intermediaries between foreign western merchants and the domestic market. In spite of the dominant
presence of foreigners in the Philippine economy “a native middle class was rising” (p. 213).

In order to raise funds the merchant houses issued notes taking deposits in local currencies from people
of different economic backgrounds. This capital was given as an advance to finance agricultural
operations. “Liquid wealth” reached Filipinos in the countryside, at the same time the merchants’
exercised control over the supply of export commodities (p. 256).

The Philippines’ economic landscape was different from Southeast Asia, i.e. Malaya and Indonesia.
Western foreigners, public entities, and the Chinese joined rising domestic entrepreneurs. The Spanish
government participated financially in the origination of utility companies (steam navigation,
telegraphy); western investors entered some joint ventures with local capital (rice, sugar mills, textile
industry, railroads and electricity), and domestic businessmen invested in the tranways and created the
brewing industry. “But the crucial dichotomy between economic initiative and political authority
stamped the Philippine case as being more in the East Asian tradition than the Southeast Asian mold” (p.
289).

This processes of economic integration in the world market had its drawbacks. Income disparities
between regions and occupations became more marked. The domestic textile industry could not
compete with foreign imports. During the 1880s, ‘the decade of death,’ the lower income groups
became more susceptible to diseases due to an imbalance between commercial and subsistence
agriculture and due to the arrival of epidemics (p. 335). The upside of these transformations was
improvement in communications (telegraphy, mail, cable, steamship lines, electricity, railroads), in
finance (foreign banks arrived to Manila), and in infrastructure. The funds of the Obras Pias, a church
institution employed in the past to finance the galleon trade, were used to establish the Banco Espanol-
Filipino in 1851 and the Monte de Piedad (a savings bank and a pawn shop) in 1882. In the same year
with Obras Pias monies coming from the cargo of the galleon Filipino, a municipal water system was
built in Manila (pp. 337-38).

Benito Legarda quotes Victor Clark who wrote: “A period of industrial development and expansion
immediately preceded the insurrection that marked the beginning of the end of Spanish rule in the
Philippines” (p. 339). The United States’ occupation of the country after the war produced increases in
exports, innovations in technology, and much higher standards of living. The Philippines’ economy now
would resemble more closely the Southeast Asian model. “The price of twentieth-century progress
would be economic dependence” (p. 340).

Today's History September 6, 1834 – by a royal decree

Governor-General Félix Berenguer de Marquina recommended that the King of Spain open Manila to
world commerce. Furthermore, the bankruptcy of the Real Compaña de Filipinas (Royal Company of the
Philippines) catapulted the Spanish king to open Manila to world trade. In a royal decree issued on
September 6, 1834, the privileges of the company were revoked and the port of Manila was opened to
trade.

September 6, 1834 – by a royal decree, Su Majestad or Your Majesty the King declared the Royal
Company of the Philippines abolished and opened Manila’s ports to world trade.

Because Manila was a great harbor (the shape of the bay protected trade boats from rough waters) it
became one of the best cities to trade with, luring American, British and other European and Asian
merchants to its shores. As a result, Spain’s economic supremacy lost its footing in the region.

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.

The 19th century

By the late 18th century, political and economic changes in Europe were finally beginning to affect Spain
and, thus, the Philippines. Important as a stimulus to trade was the gradual elimination of the monopoly
enjoyed by the galleon to Acapulco. The last galleon arrived in Manila in 1815, and by the mid-1830s
Manila was open to foreign merchants almost without restriction. The demand for Philippine sugar and
abaca (hemp) grew apace, and the volume of exports to Europe expanded even further after the
completion of the Suez Canal in 1869.

The growth of commercial agriculture resulted in the appearance of a new class. Alongside the
landholdings of the church and the rice estates of the pre-Spanish nobility there arose haciendas of
coffee, hemp, and sugar, often the property of enterprising Chinese-Filipino mestizos. Some of the
families that gained prominence in the 19th century have continued to play an important role in
Philippine economics and politics.

REFERENCE:

Port of Manila Review and History (n.d.). Retrieved from

Legarda B. (2001, November). After the Galleons: Foreign Trade, Economic Change and
Entrepreneurship in the Nineteenth-Century Philippines. Retrieved from
https://eh.net/book_reviews/after-the-galleons-foreign-trade-economic-change-and-entrepreneurship-
in-the-nineteenth-century-philippines/
Domingo R. (2017, October). Today's History September 6, 1834 – by a royal decree. Retrieved from
https://ph.toluna.com/opinions/3482138/Today-s-History-September-6,-1834-%E2%80%93-by-a-royal-
decree

Trade with Europe and America (n.d.) Retrieved from http://countrystudies.us/philippines/6.htm

The 19th Century (n.d) Retrieved from https://www.britannica.com/place/Philippines/The-19th-century