EVOLUTION OF THE

PHILIPPINE ECONOMY
 What we'll
discuss
• Different Economic • Different administrations and
Periods their economic
accomplishments
• Political/Economic
Units
• Economic Activities
• Systems
 LESSON
OBJECTIVES
At the end of lesson, students are
expected to:
• to learn about the different
timelines of Philippine
Economy, its activities,
systems, and units.
• know & understand different
administrations alongside their
economic accomplishments
Pre-Colonial
Period
 Agriculture
• Pre-colonial Philippine
societies relied more
on swidden agriculture
than intensive
permanent agriculture.
Weaving &
Pottery
SHIPBUILDING & MINING
 FISHING
• The natives made use of the
salambao, which is a type of
raft that utilizes a large
fishing net which is lowered
into the water via a type of
lever made of two criss-
crossed poles.
 Barter

• is the process of
trading services or
goods between two
parties without using
money in the
 POLITICAL/ECONOMIC
Barangay UNIT
• earliest form of
government. It was
ruled by a datu or
village chief who
was also known as a
rajah.
 Sultanate

• was first established in the

Philippines in 1405 when
Muslim traders set foot in
the shores of Sulu and
Jolo.
 TRADES
• Active trade between China
and the Philippines took
place only in the tenth
century. Earlier trade
between China and the
Philippines had to be
transacted mainly through
the Vietnam coast.
 OTHER TRADES

Japan - Nagasaki Traders

Arabs - Indirect and

Occasional

Local Trade - Luzon to

Mindanao
 ECONOMIC SYSTEM

Traditional economy prevailed

throughout the archipelago.

Pre-colonial Philippine economy was also

partly command.
 END OF PRE-
COLONIAL
PERIOD TOPIC
DISCUSSION
COLONIAL PERIOD
 SPANISH PERIOD
• Controlled Philippine
economy for 333 years.

• Church and State joined

powers to ensure economic
reforms
 ENCOMIENDA SYSTEM
• a form of forced and unpaid
labor used by Spanish
authorities and settlers in the
colonies of the Spanish
Empire.

• Introduced by Miguel
Lopez de Legazpi in 1570.
 ENCOMENDEROS
• were granted the right to
compel indigenous people to
work their land and to pay
tribute.

• encomenderos were
conquistadors themselves
or their descendants.
 THREE TYPES OF ENCOMIENDA IN THE PHILIPPINES
• ROYAL ENCOMIENDA -
Principal towns and ports belongs
to the King of Spain
• PRIVATE ENCOMIENDA - Owned
by the King's protégés who conquered
lands

• ECCLESIASTICAL ENCOMIENDA -
Managed by religous congregations
 VISITADOR AND RESIDENCIA
• Spaniards who were
commissioned by the King
of Spain.

• Sent to monitor the

activities of Spanish
officials.
 POLO Y SERVICIOS

• Forced labor of all Filipino males

from 16 to 60 years old for 40-day
periods.

• The word polo refers to community

work, and the laborer was called
polista.
• Gobernadorcillos and cabezas
de barangay are exempted from
forced labor.

• Exemption from Polo y

Servicios can be done by
paying the falla.
• The service was reduced to
fifteen days a year in 1884.
 ONEROUS TAXATION
• Tribute increased from eight reales to fifteen reales.
• Tribute was placed by cedula personal in 1884.
• Anyone not bearing a cedula will be considered as a
filibustero.
• Sambongan or donativo de Zamboanga was collected to crush
rebellions.
• Vinta and falua were raised to protect provinces from government
enemies.
 BANDAL
A
• A form of direct taxes that the
Spaniards implemented in which
the natives were coerced to sell
their products to the government
at very low prices.
• Filipinos were either not properly paid or not paid at all.

• Failure of Spanish government to pay back the debt owed to

Kapampangans ignited a revolt in 1660-1661.

• Bandala was abolished in Pampanga, Tondo, and Southern Tagalog

Provinces in 1872.
 GALLEON TRADE
• Were Spanish trading ships which for
two and a half centuries linked the
Spanish Crown’s Viceroyalty of New
Spain, based in Mexico City.

• The ships made one or two round-trip

voyages per year between the ports of
Acapulco and Manila.
 BOLETA SYSTEM
• Was a ticket that entitles a person to ship goods to Mexico. Traders who
do not have enough money to buy a "boleta" will borrow money from
Spanish friars.

• The money that the traders borrowed from the friars came from the
donation to the church known as " Obras Pias".
 OBRAS PIAS
• Charitable foundations for the
support of hospitals, convents,
missions, and schools, as well as
chaplaincies, which were
established during the colonial
period.
 ROYAL ECONOMIC SOCIETY OF FRIENDS OF
THE COUNTRY
• The Real Sociedad Económica de
Amigos del País de Manila was founded
in 1781 by Governor-General José Basco
y Vargas.
• implemented the monopolies on the areca nut,
tobacco, spirited liquors and explosives.
 ROYAL COMPANY OF THE PHILIPPINES
• Was a chartered company founded in
1785, directed to establish a
monopoly on the Spanish Philippines
and all surrounding trade. It weakened
in importance until it was dissolved in
the 1830s.
 TOBACCO MONOPOLY
• Refers to the 1782 economic program
of Spanish Governor General Jose V.
Basco, in which tobacco production in
the Philippines was under total control
of the government.
• Brought in the country from Mexico,
this became the Philippines' most
important industry in the 18th century.
It took effect through a royal decree
signed by King Carlos III of Spain.

• As the tobacco monopoly fueled further

unrest, Spain finally abolished the
monopoly on December 3, 1882.
 OPENING OF SUEZ
CANAL
• in 1869, the Suez Canal opened. The
canal enabled the Philippines to have
direct commercial relations with
Spain instead of through Mexico (via
the galleon trade).
 ECONOMIC SYSTEM

• Purely command, authority came

from the King of Spain.

• Economic reforms of the king were

passed down to his representing
officials.
END OF SPANISH PERIOD TOPIC
DISCUSSION
AMERICAN PERIOD
 TREATY OF PARIS

• Was an agreement made in 1898 that resulted

in the Spanish Empire's surrendering control
of Cuba and ceding Puerto Rico, parts of the
Spanish West Indies, the island of Guam, and
the Philippines to the United States.
 Payne-Aldrich Tariff Act (1909)

• In August 1909, Congress passed the

Payne Aldrich Tariff Act, which provided
for free entry to the United States of all
Philippine products except rice, sugar,
and tobacco. Rice imports were
subjected to regular tariffs, and quotas
are established for sugar and tobacco.
 Underwood – Simmons Act (1913)

• Congress passed The Underwood Tariff Act in

1913. Its purpose was to reduce levies on
manufactured and semi-manufactured goods
and to eliminate duties on most raw materials.
To compensate for the loss of revenue, the act
also levied a graduated income tax.
 Hare-Hawes-Cutting Act (1933)

• Hare–Hawes–Cutting Act, (1933), the first law

setting a specific date for Philippine
independence from the United States. It was
passed by Congress as a result of pressure
from two sources: American farmers, who,
during the Great Depression, feared
competition from Filipino sugar and coconut
oils; and Filipino leaders, who were eager to
run their own government.
 Hare-Hawes-Cutting Act (1933)
• The bill was passed by the Senate in
December 1932 but was vetoed by Pres.
Herbert Hoover. Congress promptly overrode
his veto, and the bill became law on Jan. 17,
1933. The act, however, required approval by
the Philippine Senate, and this was not
forthcoming.

• Filipino political leader Manuel Quezon led a

campaign against the bill because of
provisions in it that allowed the indefinite
retention of U.S. military bases in the islands.
 Tydings-McDuffie Act (1934)

• Tydings-McDuffie Act, also called Philippine

Commonwealth and Independence Act,
(1934), the U.S. statute that provided for
Philippine independence, to take effect on July
4, 1946, after a 10-year transitional period of
Commonwealth government. The bill was
signed by U.S. Pres. Franklin D. Roosevelt on
March 24, 1934, and was sent to the
Philippine Senate for approval.
 ECONOMIC SYSTEM

• Market economy dominated in

the country, although USA still
controls Philippines’ major
industries.

• Resources are owned by

every citizen, no
government interruptions.
 END RESULT

• The establishment and proliferation of

trading companies which became
prominent institutions.
• The system of communication was also
improved which helped in efficient trading
in and out of the country.
• Roads were constructed, the number of
bridges increased and water pumps were
installed
END OF AMERICAN
PERIOD TOPIC
DISCUSSION
JAPANESE PERIOD
 The Puppet Government

• On October 14, 1943, the declaration of the

Philippine Independence was read and the
“Puppet Republic” was formally inaugurated.
Jose P. Laurel was declared as the President of
the “Puppet Government”.
 Mickey Mouse Money

• During their control of the island, the

Japanese government issued new
currency. These peso were non-
affectionately named “Mickey Mouse
money” by the Filipinos due to their value
drastically decreased near the end of
World War II.
 GOVERNMENT OFFICES
National Food Production Campaign Office
• It was put up to launch a nationwide food
production campaign.

Economic Planning Board

• Was formed and tasked to supervise the
procurement of prime commodities.

Bigasang Bayan & National Distribution Corporation

• Were organized to ensure that rice and other goods
were equitably distributed.
 Greater East Asia Co-Prosperity Sphere

• Was an imperialist concept created and

promulgated for occupied Asian
populations from 1930 to 1945 by the
Empire of Japan. It extended across the
Asia-Pacific and promoted the cultural
and economic unity of Northeast Asians,
Southeast Asians, South Asians and
Oceanians.
 ECONOMIC SYSTEM

• Totally command economy, the

Imperial army controlled all of the
resources and industries that we
have.

• The Japanese looted

everything in our country and
shipped it back all the way to
Japan.
 END RESULT
• 1.Many Filipinos, Americans, and Japanese
died in the battlefields. It was an all-out
war in the air, on land, and on water.
• 2.Hundreds of cities, towns, and barrios
were destroyed. Millions of dollars’ worth
of property were lost.
• 3.Economic activities during the war were
limited. Industry, commerce, and trade
wee at a standstill. Work animals
decreased and agriculture suffered. Most
of the people engaged in the buy –and-sell
business.
END OF JAPANESE PERIOD
TOPIC DISCUSSION
POST-WAR AFTERMATH
TWILIGHT DAYS OF THE COMMONWEALTH
 Bell Trade Act (1946)
• The Bell Trade Act of 1946, also known as
the Philippine Trade Act, was an act
passed by the United States Congress
specifying policy governing trade
between the Philippines and the United
States following independence of the
Philippines from the United States.

• The United States Congress offered $800

million for post World War II rebuilding
funds if the Bell Trade Act was ratified by
the Philippine Congress.
 TYDINGS REHABILTATION ACT (1946)
• Passed by the US Congress and was
approved by the US President. This Act
created the US Philippine War Damage
Commission, authorized it to expend a
total of $400,000,000 in payment of
private war-damage claims and another
$120,000,000 for the restoration of
public property. Of this latter amount
$57,000,000 was allotted to the
commission itself.
• The Commission opened its offices
in Manila towards the end of 1946,
but the public property claim
payments did not begin until the later
half of 1947. Private property claims
started April 1948, the month of
President Roxas death.
 PARITY RIGHTS
• "Parity rights" granting U.S. citizens
corporations rights to Philippine natural
resources equal and operation of public
utilities to those of Philippine citizens,
contrary to Article XIII in the 1935
Philippine Constitution, necessitating a
constitutional amendment.

• Filipinos objected to the so-called Parity

Amendment/Rights. Nonetheless, some
powerful Filipinos involved in these
negotiations stood to benefit from the
arrangement.
 PHILIPPINE CIVIL AFFAIRS UNIT
• The PCAUs consisted of 30 special U.S. Army
teams tasked to revitalize combat-damaged
areas with as little meddling as possible from
regular military units after MacArthur’s return
to the Philippines in October 1944.

• Its officers had specialties in medicine, law

enforcement, engineering, transportation,
labor, supply, and finance. In the post-combat
second phase, the PCAUs helped re establish
economic activity, schools and public health
systems, and restored local governance to the
Commonwealth as soon as practicable.
ECONOMIC DAMAGES (POST-WAR)

• INDUSTRIES: PHP 582,500,000

• DOMESTIC ASSETS: PHP 798,767,595
• LIVESTOCK POPULATION: 35% LEFT
• AGRICULTURAL INDUSTRY POWER: 40% LOST
 END OF POST-WAR
AFTERMATH DISCUSSION
POST-COLONIAL PERIOD
DIFFERENT ADMINISTRATIONS
AND THEIR ECONOMIC
ACCOMPLISHMENTS
 • Adopted pro-United States economic policies.
MANUEL ROXAS • Worked for the amendment of the 1935 Constitution to give the
(1946 – 1948) Americans parity rights in the exploration, development, and use
of Philippine natural resources as mandated by the Tydings
Rehabilitation Act and the Bell Trade Act.
• Promoted American investments in the country as a strategy to
improve the national economy.
• Assumed all debts, deemed valid and existing, of all local
government units.
• Granted general amnesty to guerillas and perceived collaborators
as a step toward attaining national peace and reconciliation and
rebuilding the economy.
 • Faced a big balance of payments deficit (dollar
ELPIDIO QUIRINO outflow was almost 250%of the dollar inflow).
(1948 – 1953) • Adopted an import substitution policy for the first
time to address the serious balance of payments
deficit of the country.
• Signed the RP-US Agreement of 1952 that
enabled investors to convert their savings into dollars.
• Signed the law that established the Central Bank of
the Philippines, which served as the country's
monetary authority.
• Established the first rural banks in the country to
promote rural development and to curb insurgency in
the countryside.
 • Signed the Agricultural Tenancy Act (1954) that granted the
tenants the right to choose the system of tenancy they would
want their landlords to cover them.
RAMON MAGSAYSAY
• Signed the Laurel-Langley Agreement that raised Philippine
(1953 – 1957)
tariffs on US exports and reduced US tariffs on Philippine
exports for the period 1956-1974.
• Organized the National Resettlement and Rehabilitation
Administration (NARRA) that resettled around 8,800 families in
twenty-two resettlement sites in 1955.
• Created the Farmers Cooperative and Marketing Associations
(FACOMA) which helped the farmers sell their products, and the
Agricultural Credit and Cooperative Financing Administration
(ACCFA) which extended loans to the farmers.
• Constructed artesian wells throughout the country
to provide the people with clean potable water.
• Constructed more feeder roads that facilitated the
transport of goods from the farms to the markets.
• Established more irrigation projects and
sent agricultural experts to the countryside to help
the farmers.
CARLOS GARCIA • Continued the import substitution policy of
(1957 – 1961) President Quirino to address the worsening
balance of payments deficit of the country.
• Implemented the Filipino Retail Nationalization
Act--the basis of the controversial "Filipino First
policy, which limited to Filipino the right to
engage in retail trade businesses in the country.
• Controlled the outflow of foreign exchange by
banning the importation of nonessential goods.
 • Removed all the trade barriers, restored free trade
DIOSDADO MACAPAGAL with the United States, and other nations.
(1961 – 1965) • Allowed the importation of rice and other goods.
• Initiated the Decontrol Program that removed the
foreign exchange restrictions and devalued the peso to
attract more foreign investors.
• Signed the Land Reform Code of 1963, which aimed to
increase the production of food and commercial crops
through better utilization of land.
• Increased foreign borrowings up to $600 million to
beef up the country's balance of payments and prevent
the peso from further devaluation.
 • Increased the country's foreign debt as an important
component in the attainment of national development
FERDINAND MARCOS
by availing of the loans extended by the World Bank and
(1965 – 1986) the International Monetary Fund.
• Approved the country's membership in the Association
of Southeast Asian Nations (ASEAN).
• Issued Presidential Decree 1786 that codified all existing
laws on local and foreign investments.
• Codified all labor laws in the country.
• Signed Presidential Decree 27 and placed the entire
island under land Reform.
• Organized the Samahang Nayon as a nationwide
cooperative of farmers.
• Established the Masagana 99 and the Masaganang
Maisan programs that increased the yields of rice
and corn in the 1970s.
• Established the Board of Investments and gave
incentives to local and foreign investors.
• Placed the country under Martial Law
(Proclamation No. 1081) and took over control of
major industries and public utilities.
• Established institutions, such as the National
Economic and Development Authority (NEDA), the
National Power Corporation (Napocor), the Light
Railway Transit (LRT), and the Social Security
System (SSS).
 • Embarked on trade liberalization and deregulation,
and opened the country further to foreign investors.
CORAZON AQUINO • Signed the Omnibus Investment Code of 1987 that
(1986 – 1992) increased the incentives to foreign investments.
• Increased foreign borrowings to fill up the foreign
exchange and national budget deficits.
• Implemented the Comprehensive Agrarian Reform
Program (CARP) which was considered as a
centerpiece program of her administration.
• Privatized government- owned and controlled
corporations to generate more public funds.
• Created the Presidential Commission on Good
Government (PCGG) to recover the ill-gotten wealth
of former President Marcos and his cronies.
 • Made the country a hub for foreign investments.
FIDEL RAMOS • Entered into peace agreements with the Moro
(1992 – 1998) National Liberation Front and other dissident groups
to make the country's economic environment
conducive to investments.
• Reformed the Armed Forces of the Philippines to
prevent coup d'états.
• Solved the country's energy crisis through the special
powers granted by the Congress of the Philippines.
• Requested the Congress to liberalize the nationality
requirements in the Omnibus Investment Code.
• Continued the privatization of government assets to
raise more public Funds.
• Deregulated the policy on foreign exchange
transactions.
• Approved the creation of the Bangto Sentral ng Pilipinas
as an independent monetary authority.
• Merged the Makati Stock Exchange and the Manila
Stocks Exchange into the Philippine Stock Exchange.
• Deregulated the country's petroleum and
telecommunications industries.
• Approved the country's membership in the World Trade
Organization (WTO).
• Hosted the 1997 APEC (Asia-Pacific Economic
Cooperation) Summit Initiated the construction of
additional railways (the Light Railway Transit Il and the
Metro Railway Transit) and the Skyway along the South
Express Highway.
• Traveled to different countries to promote the country
to foreign Investors
JOSEPH ESTRADA
(1998 – 2001)
• Signed the Clean Air Act.
• Liberalized the importation of agricultural
products, such as rice, corn, poultry, and
livestock meat.
• Consummated the privatization of the
Philippine National Bank.
• Implemented pro-poor economic programs.
ERAP- Effective Relief to Alleviate Poverty.
 • Resorted to more foreign borrowings to cover
GLORIA MACAPAGAL – ARROYO
the government's ballooning fiscal deficit.
(2001 – 2010)
• Expanded the coverage and increased the
percentage of the value-added tax to generate
more revenues for the government.
• Built more airports, seaports, and expanded the
nautical highways to link the different regions of
the country and to facilitate the flow of trade
and commerce all over the archipelago.
• Expanded the North Luzon Expressway and the
Southern, Luzon Expressway and extended the
Skyway to ease up traffic and hasten the flow of
goods and services from the provinces to Metro
Manila and vice versa.
• Exempted the minimum wage- earners from
paying personal income tax to help the poor
cope with the impact of the global economic
recession which started in 2008.
• Signed the Universally Accessible Cheaper and
Quality Medicines Act.
 • Initiated the Public-Private Partnership
BENIGNO S. AQUINO III Program to create investment opportunities
and develop the economy.
(2010 – 2016)
• Improved the country's political and peace
and order situation and attracted more
investors.
• Implemented the Pantawid Pamilyang Pilipino
Program to alleviate poverty in depressed
areas of the country.
• Signed the extension of the Light Railway
Transit Lines I and Il.
• Restored investors' confidence on the national
government.
• Implemented the K to 12 Curriculum in the
basic education program.
 • Continue and maintain current macroeconomic policies,
RODRIGO DUTERTE including fiscal, monetary, and trade policies.
(2016 – 2022) • Institute progressive tax reform and more effective tax
collection, indexing taxes to inflation.
• Increase competitiveness and the ease of doing
business.
• Accelerate annual infrastructure spending to account for
5% of GDP, with Public-Private Partnerships playing a
key role.
• Promote rural and value chain development toward
increasing agricultural and rural enterprise productivity
and rural tourism.
• Ensure security of land tenure to encourage
investments, and address bottlenecks in land
management and titling agencies.
• Invest in human capital development, including health and
education systems, and match skills and training.
• Promote science, technology, and the creative arts to
enhance innovation and creative capacity.
• Improve social protection programs, including the
government's Conditional Cash Transfer program.
• Strengthen implementation of the Responsible Parenthood
and Reproductive Health Law.
• Implemented the Build! Build! Build! Infrastructure Plan
which according to the administration will usher in the
"Golden Age of Infrastructure".
• The goals of the program are to reduce poverty, encourage
economic growth and reduce congestion in Metro
Manila. The program also involves the continuation of some
projects under previous administrations.
END OF POST-COLONIAL
PERIOD DISCUSSION