ECONOMIC CONTEXT

The nineteenth century is considered the birth of modern life, more so, the birth of many
nation-states all over the world. For us to understand what Dr. Rizal have done during
the nineteenth century, let us look the different developments and accomplishments on
that period that changed and shaped the landscape of the Philippines economy.

Trading was already apparent among our ancestors even before the Spaniards
colonized the Philippines

Early Philippine merchants traded with various countries, including China, Japan, Siam,
Cambodia, India, Borneo, and the Moluccas.

The Spanish Crown saw an opportunity to profit from this trade and eventually closed the
ports of Manila to all countries except Mexico.

Why still open for Mexico?

- During the l6th century, Mexico was a colony of Spain, just like the Philippines.
- This created a monopoly because Spain had exclusive control over the trade route and
the goods that were traded.

The birth of the Manila-Acapulco Trade also known as Galleon Trade (1565 - 1815)
Andres de Urdaneta a circumnavigator is the person who was able to discover the route
from the Philippines to Mexico

The trade monopoly that emerged from this decision made Manila the center of
commerce in the East.
Php. 500,000 Acapulco – Manila 120 days
Php. 250,000 Manila – Acapulco 90 days

Mangoes from Manila, as well as tamarind, rice, carabao, Chinese tea, textiles, fireworks,
perfume. precious stones, and tuba (a coconut wine), were sent to Mexico.

On the return voyage. numerous and valuable flora and fauna were brought into the
Philippines, including guava, avocado, papaya, pineapple, horses, and cattle

Polo y servicio - forced labor for males between 16 to 60 years old. Polistas worked for
40 days which was later reduced to 15 days. Those who can pay a fee called falla was
exempted from work.

Spain become a mercantilist superpower but not forever

1. By the late 18th century. the Galleon system faced tough competition as other nations
became self-sufficient and preferred direct trade. Spain's trading system and the
demand for Asian goods eventually declined.
2. Spain was heavily dependent on the silver mines of its colonies in South America,
which slowly dwindled. The value of silver also declined due to the increased production
of silver in Americas, reducing the profit margins of Galleon Trade merchants.
3. Revolts, particularly in the War for Independence in Mexico, took place in the New
World, thus shifting the focus and priority of consumers away from trade.

With the old trade system no longer sustainable, the Galleon Trade was ended by decree
(an order issued by a legal authority; a policy pronouncement) during the first decade of
the 19th century.

Because the Galleon Trade ended, the Philippines need a commercial purpose.

The economic opportunities created by the Industrial Revolution had encouraged Spain
in 1834 to open the Philippine economy to world commerce.

The Philippines became a supplier of raw materials for the industries of the West by
utilizing its underutilized land resources to venture into cash crop agriculture.

Cash Crop Agriculture - is a type of farming where crops are grown primarily for sale
rather than for personal or local consumption.

British, Dutch, and American trading companies invested large capital in the country for
the large-scale production of different products, such as tobacco and sugar. To make
transactions easier, foreign investors need people who are already in the Philippines,
such as Chinese, mestizos, and rich natives. They help them with the acquisition of
lands. Mobilization of labor, transportation of crops, and retail trade. Chinese immigrants
served as middlemen between the provinces, where the crops were planted, and the
merchant houses of the Mestizos in Manila.

Rich natives became tenants, known as 'Inquilinos' in Spanish. Inquilinos oversee the
production of cash crops by subleasing large estates or haciendas from friars and then
subletting them to indigenous farmers.

Opening Ports to World Trade

- September 6, 1834, Su Majestad or Your Majesty the King declared the Royal
Company of the Philippines.
- Governor – General Felix Berenguer de Marquina recommended to open Manila to
World Commerce
- Growing number of Merchants
- Bankruptcy
- Manila was a great harbour

Significant Person Involved Opening of World Trade

- King Charless III of Spain
- Governor – General Felix Berenguer de Marquina
 - Su Majestad or Your Majesty the King
- Governor – General Basco
- Tomas de Comyn (1798)
- George W. Hubell (1821)

Opening of Suez Canal (1869)

-The invention of steam ships
- Artificial sea-level waterway in Egypt, the canal connects the Mediterranean Sea to the
Red Sea through the Isthmus of Suez
- Constructed by the Suez Canal Company between 1859 and 1869 under French
diplomat Ferdinand de Lesseps
- Officially opened on November 17, 1869.
- Before the opening of the canal, a steamer from Barcelona had to sail around the Cape
of Good Hope to reach Manila for more than three months with the canal opened, voyage
lessened to only 32 to 40 days.

When the Suez Canal, an artificial sea-level waterway, was opened, the distance of travel
between Europe and the Philippines was considerably shortened. (Sauna 3 months w/out
the suez canal and w/ 40 days). The opening of the Suez Canal, construction of steel
bridges, and safer and faster gave way to more intensive production of crops. which
provided a huge advantage in commercial enterprises.

From this, positive effects took place as the industrial revolution contributed many things
to the people:
1. The Philippines was opened for world commerce.
2. Foreigners were engaged in manufacturing and agriculture.
3. The Philippine economy became dynamic and balanced.
4. There was rise of new influential and wealthy Filipino middle class
5. People were encouraged to participate in the trade.
6. Migration and increase in population were encouraged.

During 1825, the total trade of the Philippines was only 2.8 million pesos. In 1875, it was
31.1 million pesos, and by 1895, it had grown to 62 million pesos.

Monopoly – is derived from the greek word ‘monos’ meaning ONE and ‘polein’ means
sell.
- A single seller who sells distinct products in the market without competition.

EXPORTS AND IMPORTS

-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
-Manila was known as most all colonial ports worldwide during the Spanish era
- Sugar, abaca, tobacco, and coffee exports increased in concentration as they were
shipped to the United Kingdom, China, British East Indies, United States, and Spain
- Foreign trade was dominated by the British and Americans
- Philippine economy experienced tremendous expansion
- The governor of the harbor would inspect the Chinese products as they arrived in
Acapulco.
- the Philippines throughout the 19th century gave rise to haciendas, also referred to as
the
"cash-crop economy."

PRESENT
1. THE GALLEON TRADE HAS BEEN REPLACED BY GLOBALIZED TRADE. THE PHILIPPINES NOW ENGAGES IN
INTERNATIONAL TRADE WITH VARIOUS COUNTRIES, EXPORTING ELECTRONICS, GARMETS AND AGRICULTURAL
PRODUCT
2. CASH CROP AGRICULTURE MODERN FARMING TECHNIQUES, COMMERCIALIZATION AND DIVERSIFICATION HAVE LED
TO THE PRODUCTION OF A WIDER RANGE OF CROPS INCLUDING RICE, FRUITS AND VEGETABLES.
3. OPENING OF SUEZ CANAL THE PHILIPPINES BENEFITS FROM TRADE ROUTE AS IT ALLOWS TO FASTER AND MORE
EFFICIENT TRANSPORTATION OF GOODS TO AND FROM INTERNATIONAL MARKETS
4. OPENING PORTS TO WORLDWIDE TRADE THE PHILIPPINES HAS AN OPEN DOOR POLICY FOR INTERNATIONAL TRADE,
ACTIVELY PARTICIPATING IN FREE TRADE AGREEMENTS WITH OTHER COUNTRIES. THIS ALLOW FOR GREATER ACCESS TO
GLOBAL MARKETS AND PROMOTES ECONOMIC
5. MONOPOLY THE PHILIPPINES NOW OPERATES UNDER A FREE MARKET SYSTEM, WHERE COMPETITION AND PRIVTE
ENTERPRISES DRIVE ECONOMIC ACTIVITY, WHILE MONOPOLIES STILL EXIST THEY ARE SUBJECT TO ANTITRUST LAWS
AND REGULAIONS AIMED ATE PROMOTING FAIR COMPETITION

What does all of this have to do with Rizal?

- The fast tempo of economic progress in the Philippines during the 19th century
facilitated by Industrial Revolution resulted to the rise to a new breed of rich and
influential Filipino middle class.
- This made the Inquilino class wealthy, which include the Rizal patriarch, the family
Mercado.

When Rizal's Chinese ancestor Domingo Lam-co had come to the Binan hacienda in mid-
eighteenth century. The average holding of an Inquilino was 2.9 hectares.

After Rizal's father had moved to the Calamba hacienda, the Rizal family in the 1890s
rented from the hacienda over 390 hectares.

The family Mercado became one of the most affluent family in Calamba. Not just his
father side but also his mother side. This enabled the family to live a prosperous and
comfortable life, thus giving the Rizal children more time and focus toward education.