La Consolacion College Manila

A Critical Analysis on the role of the

Chinese in the Development of
Philippine Economy

Submitted by:
Jennifer Alexis B. Nocon
ABCOMM23

Submitted on:
November 4, 2019
The Chinese in the Philippines
There are several ways in defining “Chinese in the Philippines”, Chinese in the
Philippines are so-called alien Chinese, and they are the Chinese by citizenship. In general,
Chinese in the Philippines is a large group of all ethnic Chinese. It is a well-known fact that the
Chinese in the Philippines hold an important position in the country’s economy because they
have contributed a lot to the economic growth of the Philippines even before the Spanish invaded
the country.
According to Omohundro (1981), The Chinese, either as Chinese citizens or naturalized
Filipino, own 9 out of every 10 retail stores, 8 out of every 10 eateries, 9 out of every 10 lumber
yards and hardware stores, 5 out of 8 huge rice mills and warehouses of an estimated ₱250
million business every year, the Chinese spawn 80% and own half the money involved in the
other 20%.
The number of Chinese registered in 1972 was already in 98,306 with 70 to 80 percent
are those in urban regions and only 25 percent in the rural regions. (Palanca, 1977)
Table 1. Registered Aliens by Nationality and Residence, 1972
Number Percentage
Chinese 98,306 86.8
Manila 35,499
Provinces 25,977
Cities 20,325
Ports & subports 16,505
Americans 9,377 8.3
Other aliens 5,560 4.9
Total Registered Aliens 113,243 100.0
Source: Journal of Philippine Statistics, 4(1974): 17
The Chinese had a huge contribution to the economy of the Philippines. Looking back in
history, the Chinese had been trading with the Philippines and there are Chinese who lived in the
Philippines.

Historical development of the Philippines' economy with the Chinese.

There had been Chinese already living in the Philippines and trading with the country as
well. The government tried to ban the Chinese in the country but the state of mind of the
authorities changed because of the opinions of the citizens in Manila about the Chinese living in
the city. For the natives, the Chinese were convenient and that they supplied the natives in
exchange for rice, chickens and the lumber that they cut from the forest. In this way, the natives
were able to live even without money because the Chinese are paying them in kind. It is clear
here that the Chinese have owned sugar mills before. (Diaz-Trechuelo, 1770 – 1898)
 The Chinese were described as "the nation highly skilled and industrious, which has
always been of great use as they applied themselves to all kinds of trading as well as to
manufacturing and agriculture." They have supplied the natives and they always sell more
cheaply than those Spaniards who owned stores. They were considered as sources of possible
income. (Guerrero, 1770 – 1898)
By following this, in the table below, it shows that Chinese in the year 1968 belong to the
upper-middle class. This table was taken from the study of College students from two schools in
Cebu city. (Palanca, 1977)
Table 2. Economic Status of Filipino and Chinese
Economic Class Filipinos (N = 149) Chinese (N = 46)
Lowest 0.0% 0.0%
Low 32.2 6.5
Middle 43.6 34.8
Upper 22.6 55.2
Highest 1.3 6.3

In relation to the table 1 presented that the Chinese makes up one-fourth of one percent of
the entire population. We can assume that the registered Chinese aliens paying 10.5 percent of all
income tax and if we estimate 500,000 to 800,000 ethnic Chinese mean that they make up 5 to 8
percent of all income taxpayers.
Table 3. Registered Chinese Corporation of the Philippines from 1946 to 1966.
Nature of Business No. of Firms Capital (in ₱1000)
Commerce 361 ₱40,897
Manufacturing 411 31,769
Mining 26 703
Services 62 2,698
Source: Securities and Exchange Commission, Philippines
Here shows that the Chinese have more corporate investments in Commerce and
Manufacturing and that is in relation to what it stated above that the Chinese are more into
Commercial and Manufacturing in terms of trading.

The Chinese helped the Philippines’ Economy

From the tables presented above, Chinese does play an important role in the Philippines
economy even before. They have a stronger hold in the Manufacturing and Commercials sectors.
Their contributions from the history are many, they have generated much in the industrialization
and development, they also opened more job employment opportunities for the Filipinos. They
have given jobs for those Filipinos who are having a hard time finding job. (Palanca, 1977) They
don’t ask for more, the Chinese are more into material. They wanted to help the Filipinos to have
a better life regardless of the hardships under the invasions before. Other than the firms they
opened, they were also one of the countries that the Filipinos have been trading for.
In Davao, direct trade with China is dominated and has a significance in their economy,
not only in trading but also in the daily lives of the Filipinos in Davao. The Chinese became part
of the daily lives of the people in the market: the wholesalers, the cheap stores owned by the
Chinese. Indeed, the involvement of China is still a major element in certain activities that it may
also be true in the entire economy of the Philippines. (Hodder, 2007)
According to Hodder (2007), there is a little doubt that the economic significance of the Chinese
in the Philippines is greater than the figure commonly given for the proportion of the Chinese in
the population as a whole.
In relationship to this, the Philippines’ important trade partners are in Hong Kong and Taiwan
which are also have been trading with China as well or with United States and Japan who are the
other two countries the Philippines been trading with as well.

Ban the Chinese from the Philippines.

As what presented above, the government tried to banned the Chinese from entering the
country. If it will happen again, our economy might reach its downfall again because of them.
We cannot deny the significance of China with the Southeast Asian countries. They have a huge
important and role in the economic development of the country.
Some of the Filipinos have also fear with the economic position of the Chinese in the
country. They may be a threat economically and politically. The history shows this is not but in
today’s world, it is. The China are trying to take over politically in the Philippines as if they have
an important role in every country that they rule. They do became a huge part of the development
of the Philippines but in the century right now, they have crossed the line at some point
especially when they dictate that the Philippines should ban online gambling.
Ban will not be the solution, but the Filipinos still have a power for the Philippines. They
do have an economic importance in the country but Filipinos still have the power to decide
politically against the Chinese. They will keep on dictating what the country should have been if
the government let them. The Philippines’ cannot ban them because the Chinese became part of
the Philippines as well. If the Chinese will be banned, the American should do as well.
REFERENCES:
Palanca, E. (1977). The Economic Position of the Chinese in the Philippines. Philippine Studies, 25(1),
80-94. Retrieved from http://www.jstor.org/stable/42632369
Hodder, R. (2007). The Economic Significance of the Chinese in the Philippines: An Analysis of its
Overstatement. Philippine Studies, 55(1), 88-115. Retrieved from http://www.jstor.org/stable/42633900

Omohundro, J. (1981). Chinese Merchant Families in Iloilo: Commerce and Kin in a Central
Philippine City. Quezon City, Metro Manila: Ateneo de Manila University Press
The Historical Conservation Society. (1770 - 1898). The Chinese in the Philippines. (Vol.2).
Ermita, Manila: Solidaridad Publishing House