THE MEXICAN SUBSIDY Mexican Government sent to the Philippines an annual subsidy called the situado.

Subsidy amounted to P250.000 on the average.

THE ECONOMIC SOCIETY Governor Basco founded the Economic society of friends of the Country in 1781 to effectively implement.

THE SOCIETY DIVIDE INTO SECTORS: 1.) 2.) 3.) 4.) 5.) Factories and manufacturers Industry and popular education Natural History Domestic and foreign commerce Agriculture and rural economy Society was able to export indigo to Europe for the first time in Phil. History (1784) It is also founded the Academy of Drawing in Manila (1824)

THE GOVERNMENT OF MONOPOLIES King issued a decree in 1780 ordering the establishment of tobacco monopoly

PROVISIONS OF THE DECREE 1.) The cultivation of tobacco was prohibited except for the provinces selected to grow it. 2.) Contraband sale of tobacco was forbidden 3.) The Government had the exclusive right to purchase all tobacco products, to inspect and classify the tobacco plant, and to prepare and manufacture cigar and cigarettes. 4.) The Government had the right to prohibit the exportation or importation of tobacco by any agency not connected with the government. consequently the king, in 1881 ordered its abolition, but it was actually abolished in 1882 in the Philippines.

THE ROYAL COMPANY AIMS: To promote the progress of the Philippines by improving the foreign trade of the colony with Spain and to develop the natural resources of the Philippines by encouraging industry, manufacturing and agriculture. ROYAL COMPANY OF THE PHILIPPINES IN 1785 The company had a capital of P8,000,000

This failure may be attributed to the following causes: 1.) The Spanish merchants in the Philippines, who had been accustomed to the profitable galleon trade, did not cooperate wholeheartedly with the Company. 2.) The company was not able to establish direct commercial contact with Japan, China, and India, so it had to buy commodities from these countries through the Manila merchants, resulting in paying higher prices for those commodities than in the countries where they came from; 3.) The Company was not well-managed because its officials spent their time in activities that were not connected with the promotion of the welfare of the Company . 4.) Foreign vessels, instead of the Companys vessels, brought to Manila such items as groceries, canned goods, wine, and other Europian products. COMPANY PREVIEGES: Factors accounted for the slow development of the Philippine Economy 1.) most Spanish officials were lazy, incompetent and inefficient 2.) there were frequent quarrels among the Spaniards themselves, especially between the clergy and the governor-general, on one hand and the high ranking ecclesiastical officials and the friar curates on the other. Tomas de Comyn, said in 1810: In order to be a chief (governor) of a province -In order to be a chief (governor) of a province of those Islands (Philippines), no training or knowledge or special services are necessary; all persons ( Spaniards) are fit and admissible.. It is quite a common thing to see a barber, or a governors lackey, a sailor or a administrator, and a captain of the forces of a populous province without any counselor but his rude understanding, or any guide but his passions.