The Galleon Trade

When the Spaniards came to the Philippines, our ancestors were

already trading with China, Japan, Siam, India, Cambodia, Borneo
and the Moluccas. The Spanish government continued trade
relations with these countries, and the Manila became the center of
commerce in the East. The Spaniards closed the ports of Manila to
all countries except Mexico. Thus, the Manila–Acapulco Trade, better
known as the "Galleon Trade" was born. The Galleon Trade was a
government monopoly. Only two galleons were used: One sailed
from Acapulco to Manila with some 500,000 pesos worth of goods,
spending 120 days at sea; the other sailed from Manila to Acapulco
with some 250,000 pesos worth of goods spending 90 days at sea.

It also allowed modern, liberal ideas to enter the country, eventually

inspiring the movement for independence from Spain. And because
the Spaniards were so engrossed in making profits from the Galleon Trade, they hardly had
any time to further exploit our natural resources.

Basco’s Reforms
Filipino farmers and traders finally had a taste of prosperity when Governor General Jose
Basco y Vargas instituted reforms intended to free the economy from its dependence on
Chinese and Mexican trade. Basco implemented a “general economic plan” aimed at making
the Philippines self sufficient. He established the “Economic Society of Friends of the
Country”, which gave incentives to farmers for planting cotton, spices, and sugarcane;
encouraged miners to extract gold, silver, tin, and copper; and rewarded investors for
scientific discoveries they made.

Tobacco Monopoly
The tobacco industry was placed under government control during the administration of
Governor General Basco. In 1781, a tobacco monopoly was implemented in the Cagayan
Valley, Ilocos Norte, Ilocos Sur, La Union, Isabela, Abra, Nueva Ecija, and Marinduque. Each
of these provinces planted nothing but tobacco and sold their harvest only to the
government at a pre-designated price, leaving little for the farmers. No other province was
allowed to plant tobacco. The government exported the tobacco to other countries and also
part of it to the cigarette factories in Manila.

The tobacco monopoly successfully raised revenues for the colonial government and made
Philippine tobacco