CHAPTER 2

ECONOMIC HISTORY OF THE PHILIPPINES

A HISTORICAL PERSPECTIVE ON
PHILIPPINE ECONOMY
 Pre-Spanish Period
• Barangays
 – Balangay

 – Datu

• Land Ownership
 – Thru inheritance and occupation

Ex: Rice Terraces in Benguet

SPANISH PERIOD

 GALLEON TRADE
 ECONOMIC SOCIETY OF FRIENDS OF THE
COUNTRY
 ROYAL COMPANY OF THE PHILIPPINES

 TABACCO MONOPOLY

 ENCOMIENDA SYSTEM

 AGRICULTURAL PROGRESS
GALLEON TRADE

 Trade between Manila and Acapulco

 The Manila Galleons were Spanish trading
ships which for two and a half centuries linked
the Philippines with Mexico across the Pacific
Ocean, making one or two round trip voyages
per year between the ports of Acapulco and
manila, which were both part of New Spain.
ECONOMIC SOCIETY OF FRIENDS OF THE
COUNTRY
 Governor Jose Basco y Vargas founded ESFC
– Focused on the economic development of the
Country
- Who served as the 53rd governor of the
Philippines under the Spanish Empire, from
1778 to 1787
- - he was one of the most economic minded
governor.
ROYAL COMPANY OF THE PHILIPPINES

 Established to boost the Philippines economy

through trade and development of
agriculture and industrial sector.
 Opened trade between Philippines and

European-regions
 Established by King Charles III
TOBACCO MONOPOLY
 Tobacco monopoly is established to obtain big
revenues.
 Selected provinces are required to plant
tobaccos:
– Nueva Ecija
– Marinduque
– Cagayan Valley
– Ilocos Sur
– Ilocos Norte
 Encouraged smoking and smuggling
ENCOMIENDA SYSTEM
 Encomienda – piece of land given to loyal
servants of the King of Spain.
 Encomiendero – Usually Spanish soldier who
managed encomienda.
 Abused by Spanish officials which resulted to
issuance of a royal decree by the King of
Spain to stop all the abuses of the
encomienderos.
 Ended in 19th century.
AGRICULTURAL PROGRESS
 Governor Basco focused on the economic
development of the country; he was often
described as the most economically-minded
Spanish governor general.
 Implemented different economic programs
and reforms.
Ex: Building roads and bridges for
transportation and introducing silk thru
planting of mulberry trees.
AMERICAN PERIOD
 Land Ownership
– Torrens System - Torrens title is a system of land
title where a register of land holdings maintained by
the state guarantees an indefeasible title to those
included in the register. Land ownership is transferred
through registration of title instead of using deeds.
– Homestead Act - The Homestead Acts were
several United States federal laws that gave an
applicant ownership of land, typically called a
"homestead", at little or no cost.
 Farmers are allowed to own at least 24 ha. of
public lands for their own family.
 Free Trade
– Concerned with exchange of goods and services without trade
barriers like tariffs and quotas.
 Tariff – tax levied on imported goods.
 Quotas – Limitation on the quantity of exported and imported
goods.
 Payne-Aldrich Act of 1909
– US products were allowed to enter the Philippines without
tariffs and quotas.
 Underwood-Simmons Act of 1913
– Tariffs and quotas were abolished but Philippine products
contains 20% foreign raw materials were not allowed to enter
US.
AGRICULTURAL DEVELOPMENT
 American’s introduced 6 majors crops:
– Rice
– Coconut
– Palay
– Corn
– Abaca
– Sugar
 Irrigation systems
 Pesticides
 Fertilizers
 Modern techniques and Technologies in Farming
INDUSTRIAL PROGRESS

 Machineries and Technology industries like

Mining, Forestry and Fishery increase in
production.
 Cigar and Cigarette factories were

established.
ECONOMIC POLICIES OF THE
PHILIPPINE REPUBLIC PRESIDENTS
 Manuel A. Roxas (1946 – 1948)
Rehabilitation and reconstruction in all aspects:
– Environmentally, Emotionally, Economically and
Culturally.
 Bell Trade Act - The Bell Trade Act' of 1946, also
known as the Philippine Trade Act, was an act passed
by the United States Congress specifying the economic
conditions governing the independence of
the Philippines from the United States.
 War Damage Act - liability in respect of damage to,
or destruction of, property caused by acts lawfully
done during, or in contemplation of the outbreak of, a
war in which it is engaged.
 Elpidio Quirino (1948 – 1953)
 Created the Agricultural Credit Cooperative

Financing Administration (ACCFA)

 To facilitate the financial help extended to the

farmers.
 Reported the activities of the government

through radio broadcast.

 Ramon Magsaysay (1954 – 1957 )
 Known as the “Man of the Masses”
 Constructed Bridges, Roads and Irrigation.
 Solve the problems on land through Land
Reformed Act of 1955. Gave emphasis on the
welfare of the poor farmers who desired to own
agricultural land.
 Established National Resettlement and
Rehabilitation act (NARRA) to gave land to
some farmers.
 Establish (FACOMA) Farmers Cooperative
Marketing Association to organized the farmers
 Carlos P. Garcia ( 1957 – 1961 )
 Objective is to free our economy from foreign
intervention and control.
 Gave priority to Filipino industries in the
distribution of resources which supported the
 Retail Nationalization Act.
 Gives recognition to the outstanding
contribution of Filipino artists, scientists,
musicians, historians and inventors.
 Diosdado Macapagal ( 1961 – 1965 )
 Lifted the control on foreign currencies and
allowed the importation of goods which
resulted to devaluation.
 Signed the Agricultural Land Reform Code
which abolished the Kasama System tilling
the land.
 Established the Land Bank of the Philippines
 Ferdinand E. Marcos ( 1965 – 1986 )
 Implemented a number of economic programs
that helps the country to enjoy the period of
economic growth from the mid-1970’s until the
early 1980’s.
 Land reform was introduced under PD Nos. 2
and 27.
 Kilusang Kabuhayan at Kaunlaran (KKK) –
aimed to promote economic development of the
Barangay’s by encouraging Barangay residents
to engage in their own livelihood projects.
 Corazon C. Aquino (1986 -1992 )
 Started to organize and reform the Politics,
the Economy, the Justice System and the
Economic status of our people.
 Privatization – selling of Government
Corporations to private sectors.
 Comprehensive Agrarian Reform Program
(CARP) – Emphasize the economic conditions
of the farmers.
 Approved the Value-Added Tax ( VAT )