A HISTORICAL

PERSPECTIVE ON

PHILIPPINE ECONOMY

PRE-SPANISH PERIOD

Early Filipinos were fishers, hunters and تcultivators.

The landowners lived in a kinship headed by aتDATU or a chief within a community called BARANGAY.

BARANGAY comes from the Malay word BALANGAYتwhich means “sail boat”.

There are three broad social classes: the datu andتhis family and nobles, the freemen, and the dependents, which were considered as slaves.

Each barangay had its own economicتactivities.

Land ownership was acquiredتthrough occupation or inheritance.

Agriculture was the main economicتactivity of our forefathers.

Our country is also rich in aquaticتresources and precious stones.

SPANISH PERIOD

They brought Christian religion to colonize and rule the country.

They also imposed their culture, customs and beliefs.

There were economic policies and reforms that the Spaniards implemented in our country to attain economic development.

THE ECONOMY

UNDER SPAIN

ECONOMIC PROGRAM DURING THE SPANISH PERIOD

GALLEON TRADE

AGRICULTURAL

PROGRESS

ENCOMIENDA SYSTEM

TOBACCO MONOPOL

Y

ROYAL COMPANY OF

THE PHILIPPINES

ECONOMIC SOCIETY OF FRIENDS OF

THE COUNTRY

AGRICULTURAL

PROGRESS

Our country is an agricultural country and farming is the main industry.

The Spanish government developed the agriculture with the implementation of modern agricultural methods.

The introduction of the first steam machine for hulling rice by Eulogio de Otaduy and the first steam machine fro hulling sugar by Nicholas Loney had helped in the production of rice and sugar.

First steam machine in hulling rice by Eulogio de Otaduy

First steam machine in hulling sugar Nicholas Loney

ENCOMIENDA SYSTEM

An ENCOMIENDA is a piece of land given to the loyal servants of the King of Spain.

The person who received it was called the ENCOMIENDERO.

The King of Spain issued royal decree to stop all the abuses of the encomienderos and required all landowners to register their lands in the Philippines.

The decree led to the widespread anomaly in land registration.

Hectares of lands owned by the Filipinos were registered under the names of the Spaniards, MESTIZOS and the elite Filipinos because many Filipinos were ignorant and not aware of the provisions of the decree and the real intentions of the Spaniards.

The encomienda system in the Philippines ended in the early years if 19th century.

GALLEON TRADE

The Spanish government opened trade between Manila and Acapulco Mexico.

In constructing the galleons, people were forced to work in a shipyard.

The Spanish merchants took advantage of the trade.

Spanish officials used the BOLETA to earn income; BOLETA is a ticket to have a space in the galleon.

The Philippine economy depended much on galleon trade during that time.

When the galleon trade was abolished, the Philippine economy suffered.

Boleta

THE ECONOMIC

DEVELOPMENT UNDER

GOVERNOR JOSE BASCO

ᴥThe administration of Governor Jose Basco y Vargas focused on the economic development of our country.

ᴥGovernor General Jose Basco y Vargas established this with the goal of developing the agricultural sector of the country and helping the country to be free form Mexico’s help.

ᴥThe production of silk was introduced through the planting of mulberry trees.

ᴥHe repaired the bridges and roads to speed up transportation of goods to the different parts of the country.

ᴥHe made sure that the reforms and economic changes that he established will benefit the Filipino people and the Spaniards government.

TOBACCO MONOPOLY

┼The Spanish government established the tobacco monopoly to obtain big revenue.

┼MONOPOLY is a market structure where there is only one individual or company, controlling the market.

┼Filipino tobacco farmers were obliged to sell their harvest to the Spanish government who can buy tobacco.

┼There are selected provinces to plant tobacco like Nueva Ecija, Marinduque, Cagayan Valley, and Ilocos provinces.

┼Even though it brings huge annual revenues to the government and contributes to the production of said product, the monopoly of tobacco did not last longer because of the abuses committed by the officials, aside form the fact that it encouraged smoking and smuggling.

ECONOMIC SOCIETY OF FRIENDS OF

THE COUNTRY

In order to implement the economic plan of Governor Basco, he founded the Economic Society of Friends of the Country.

It has the responsibility to manage and supervise the economy.

The Economic Society focused its activities on the development of the different industries particularly the agriculture.

It introduced the cultivation of mulberry trees, cotton and tea.

It also emphasized the promotion of some agricultural products like coffee, hemp and rice.

ROYAL COMPANY OF THE

PHILIPPINES

This royal company was established to boost the Philippines economy through trade and development of agriculture and industrial sectors.

The trading activities of the company competed with the Manila-Acapulco trade.

It opened the trade between the Philippines and European regions.

It was able to develop some industries of our country like wood carving in Laguna, hemp in Bicol region, sugar in Negros as well as in Pampanga and textile in Ilocos Region.

But that success was short-lived because of the abuses of Spaniards.

It was finally abolished by the Spanish government in 1834.

AMERICAN PERIOD

After the Spanish rule of more than 300 years, the Americans came.

Our economy was plagued with many problems.

Our natural resources were destroyed during the American and Spanish wars.

The American administration started to rehabilitate our economy and improve our way of living.

LAND OWNERSH

IP

☻The Americans had the intention of giving land to the poor Filipinos especially the farmers.

☻Unfortunately, the small farmers didn’t get any land.

☻The land became the property of some rich landowners, Filipino elite and Americans.

☻Most of the small farmers couldn’t pay the price to own a piece of land and couldn’t prove that they were the former owner of the land when the American government implemented the Torrens System and the Homestead Act.

☻They failed to register their property and were ignorant to avail of the provision of the Homestead Act which will enable them to acquire 24 ha. of public land for their family.

FREE TRADE

†One of the economic policies of the Americans was the implementation of free trade between United States and Philippines.

†FREE TRADE is concerned with the exchange of goods and services without trade barriers like tariffs quotas.

†Trade barriers are those that prevent trade to happen.

†TARIFF us the tax levied on imported goods while QUOTA is the limitation on the quantity of exported and imported goods.

†To establish fully the free trade relations of two countries, the following trade laws were enacted and implemented by the Americans:

PAYNE-ALDRICH ACT OF 1909

■It was the first trade act which opened our ports to the United States in 1909.

■All products from the United States were allowed to enter the Philippines without tariffs and quotas while Philippine products had quotas.

■Only 300,000 ton of sugar and 150,000 pieces of tobacco can enter the American market.

■Americans limited their imports to protect their own industries.

UNDERWOOD-SIMMONS

ACT OF 1913

◘In order to achieve the real the real essence of free trade between the Philippines and the US, tariffs and quotas were abolished but still, the law favored the Americans because Philippine products with 20 percent foreign raw materials were not allowed to enter American market.

TYDINGS-MCDUFFIE LAW OF

1934

⌂This law established the Commonwealth government in the Philippines to prepare is for independence.

⌂It brought back our freedom.

⌂The law underscores free trade during the Commonwealth Period form 1935 to 1946.

EFFECTS OF FREE TRADE

FREE TRADE

IMPROVEMENT OF TRANSPORTATION

DEVELOPMENT OF INDUSTRIES

INCREASE IN PRODUCTION

EXPANSION OF COMMERCE

TOO MUCH CONCENTRATION ON THE DEVELOPMENT OF PRODUCTS THAT YIELD HIGHER INCOME

COLONIAL MENTALITY WAS DEVELOPED

OTHER MARKETS WERE NEGLECTED

AGRICULTURAL

DEVELOPMENT

▓Model farms were established to teach the farmers the modern methods of cultivation.

▓The Americans introduced six majors crops, abaca, and sugar.

▓The Bureau of Agriculture was established in 1902.

▓Irrigation systems were constructed.

▓The use of pesticides and fertilizers, modern techniques in farming and the use of modern technology in farming were introduced to the farmers to improve their production.

INDUSTRIAL PROGRESS

¤The first step of the Americans was to introduce the new machineries and technology in industries.

¤They established new industries and diversified the old industries like mining, forestry and fishery in order to increase the production of the said industries.

¤Cottage industries to encouraged to produce goods which were of export quality, cigar and cigarette factories were established.

¤The economic development of the Philippines during the American period was typically colonial.