LEGARDA – THE ECONOMIC BACKGROUNG OF RIZAL’S TIME

- Economic background on three levels:

1. World level
2. Spanish empire
3. Philippines
I. The World Background
- Dominant theme: Globalization
- Early entry into globalization by Great Britain
- Fueled by industrial revolution and liberalized trade
- Late entry into globalization by Central Europe, Japan, Russia
- Expansion of markets and specialization
- Trade shift
- Low-bulk, high-priced goods to high-bulk, low-priced goods
- Adoption of gold standard (1870s)
- Price of silver fell
- Affected the Philippines (silver-using country)
II. The Diminished Empire
- Dominant theme: intolerance, dogmatism, pride, sectarianism
- Atmosphere of civil war
- Paralyzed economic development
- Reduced Spain’s ability to buy Philippine exports
- Cortes of Cadiz (Court of Cadiz) – Spanish city not under French occupation
- Prompted liberal ideas
1. Suppressed galleon trade (effective 1815; last galleon in Manila)
- Marked private trade between Mexico and Philippines
- Private vessels in the ports of Acapulco, San Blas, or Sonsonate in Central America
2. Sarrat Revolt (1815)
- Cadiz constitution of 1812
- Ordinary people demanded to be exempt from statute labor
- Uprising against local aristocracy, not against Spanish rule
- Ferdinand VII nullified all actions of the Cortes of Cadiz
- Spanish empire in Americas had crumbled
- Independence movement led by Creoles – ethnic Europeans born in colonies
- Bayot and Novales: first rebels motivated by the notion of Philippine independence
- Previous uprisings had come from local grievances and not nationalism or independence
- Launched the idea of independence
- Carlist War vs Ferdinand VII
- Carlists believed peasants should enjoy relative independence
- Witnessed ferocious anticlericalism
- Led to formation of a liberal government supported by a wealthy middle class
- Two events with Philippine relevance:
1. Convocation of the Cortes
- Provided for bicameral legislature with power of absolute veto to the Monarch
- Retrogressed (moved backwards from) the Enlightenment-inspired Cadiz constitution
 - Provinces became colonies in overseas America and Asia
- Loss of Philippine representation in the Cortes
- Previous Cortes entitled 32-34 delegates
2. Exclaustracion by Prime Minister Jose Alvarez Mendizabal (1836)
- Suppression of religious orders
- Confiscation of their property by the state
- For sale to private parties
- Start of the degeneration of the Spanish church
- Anticlericalism in Spain led to the “dumping” of friars into the Philippines
- Turbulent Spanish government finally led to a military coup to destroy the republic
- Antonio Canovas del Castillo – returned the monarchy
- Greatest Spanish statesmen, but also allowed Rizal’s execution
- Economic shift from protectionism to liberalism then back to protectionism
III. An Autonomous Economy
- Economic theme: “the great period 1820-1898…all things considered, constitutes in the history
of the Philippines down to the present the only moment of real near-independence” [Chaunu,
1960]
- Independence from North American metropole: Mexico before 1821
- Independence from the US after 1898
- Philippines governed by inattentive Spain
- Spain plagued with weak economy and domestic turmoil
- Mexican independence came withIturbide’s confiscation of Acapulco trade ruined Manila’s
(Spanish??) merchant class
- Threw economy under foreign merchants mostly British and American
- “…the Philippines is an Anglo-Chinese colony with a Spanish flag” [Carlos Recur]
- Hirschman index: measures concentration of trade (or degree of oligopoly and oligopsony)
- Philippines in fairly moderate concentration (>40) protected Philippines from hazards of
globalization
- Rice importation in 1873 caused two adverse effects
1. Dependence on Chinese trade networks driven by profit rather than need
2. Thiamine deficiency from imported Saigon rice causing beri-beri
- Collapse of Philippine textile export (piña, jusi, and sinamay)
- Due to importation of cotton goods
- Philippines a country of small landowners
- Unplanted lands despite tenancy indicated lack of capital
- Chinese mestizo moneylenders filled this lack
- New rich sent children to Manila to study and later abroad
- Eventually returned to the provinces with subversive a separatist ideas (filibusterismo)
- Second half of the 19th century saw advances in communication, finance, and infrastructure
- Period of growth and diversification both locally and abroad*
- Obliteration of tobacco monopoly
- Had been the main source of revenue
- Urban property tax and industrial tax became new sources of revenue
 - Inadequate since agricultural lands (main source of wealth) were not being
taxed [Sancianco]
- Main revenue sources: customs, cedula, and industrial tax
- Spent mostly on war and navy

*Year Event
1848 Steam navigation
1851 Mail service with Hong Kong
1854 First commercial bank
1869 Opening of Suez Canal
1872 Telegraph service in Manila and Cavite
1873 Direct steamship service to Spain
1882 Obliteration of tobacco monopoly
Manila’s municipal water system
1888 Manila-Malabon steam tramway
1890 Telephone system in Manila
San Miguel Brewery
1892 Manila-Dagupan railroad
- La libertad de comercio en las Islas Filipinas by Manuel Azcarraga y Palmero
- Important in the establishment of free trade in the Philippines
- On education, Philippines ahead of most colonies with higher literacy rates than that of Spain
- Sustained efforts by the Catholic Church
- Higher education was possible in the Philippines
- Philippine Revolution a revolt of the Ilustrados [Nick Joaquin]
- Aspired to be a part of European legislature
- By the end of 19th century, Philippine foreign trade accounted for 36 percent of GDP
- Sector with greatest progress and innovation in most countries including Philippines
IV. Conclusion
- Rizal’s life fell within the first age of globalization at the world level
- Level of empire, Spain failed to participate in the Philippine economy, leaving it to foreigners
- National level, Philippines greatly expanded its volume of foreign trade
- 19th century had the economic foundation for national independence