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8/8/2019 Four Wars: the Political Economy of the Filipino Republic
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
Chapter 9
1896 - 1903
Four Wars; the Political Economy
of the Filipino Republic
The Four Wars Economic Dislocation and Population Loss
The Political Economy of the Filipino Republic
Four wars broke out in the archipelago over 1896-1899. The
Christian Filipino revolution against Spain began in August 1896.
President Emilio Aguinaldo formally declared victory in September
1898; the Filipino Republic, the first in Asia, was inaugurated in
January 1899.
The Spanish-American war was featured by an American naval
victory over the antiquated Spanish fleet on May 1, 1898 in Manila
Bay. On this basis, the American President William McKinley
issued instructions on May 19, 1898 directing the military
occupation of the archipelago.
The United States began the hostilities in the Christian Filipino-
American War on February 4, 1899. The war dragged on until June
1906.
The fourth war was fought by the United States against the
Muslims of Mindanao and Sulu from July 1899 to June 1912.
We can summarize the economic and population loss from 1896 to
1903 only for Luzon and the Visayas. The setback to agriculture
was concentrated and prolonged in the rice sector, with rice importsof P129,215,500 over 1901-1910. A survey of the approach of the
Filipino Republic to political economy concludes the chapter.
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The Four Wars
The principal action that began the revolution at the end of August 1896was an attack on Manila by urban irregulars who were routed by the regime's
forces. The immediate shift of hostilities to the nearby Tagalog provinces
gave the revolution its essential nature. The fighting men were
overwhelmingly rural workers, small farmers and hacienda tenants who
fought under the pueblo upper class, their natural leaders.
During its initial phase (1896-1897) the revolution was most active in the
provinces around Manila. Cavite won its liberation as early as October 1896.
The fighting was also hard in Batangas, Laguna, Morong, Bulacan, Nueva
Ecija, Tayabas, and Bataan, with the rebels organizing in Pampanga and
Tarlac.
To the pueblo elites, many of whom were educated in Manila, political
aspirations were clear. To the fighting men, the immediate issue was
economic and agrarian, revolving around the issue of land. The haciendas
held by the Augustinians, Dominicans, and Recollects totalled some 165,000
hectares. In Cavite alone almost 50,000 hectares of the best farm lands and
pueblo sites were in the friar haciendas. The Cavite pueblos of Naic and
Santa Cruz de Malabon (the modern Tanza) were embraced within theDominican haciendas; San Francisco de Malabon (present-day Gen. Trias)
was in the Augustinian hacienda of the same name; and the Recollects' San
Juan de Imus hacienda encompassed the entire towns of Bacoor, Imus,
Cavite Viejo, and Dasmarinas. Because many of the families who had lost
their lands left the pueblos and became outlaws, the province came to be
known as the cradle of the tulisan. The rebels expelled the friars and took
over the haciendas.
During this phase of the revolution there was little fighting in the Visayasand none in the Muslim south. In Luzon, Manila was swollen with refugee
Spaniards and friars from the provinces, but it was besieged by the rebels.
The delivery of provincial produce and the businesses servicing the export
and import trade ground to a halt, and the port was closed.
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The fighting in the provinces disrupted the local economies. Food
shortages were not acute in areas where the planting of the new rice crop had
been done by August, but this was shortlived. Farm labor was dislocated andthe fields idled because most of the rebels were farm workers, but this was
remedied by the women and some men from the surplus pueblo residents.
But trade between the pueblos and Manila was paralyzed. In Cavite, where
the fighting was most extensive and furious, the economy was in ruins. In
Batangas and Laguna, where the Cavitenos crossed and attacked the enemy
garrisons, and which were staging areas for enemy counter-offensives against
Cavite, the losses were only slightly lighter, as was the case in Bulacan and
Nueva Ecija.
In scores of provinces the cedula and other taxes could not be collected.
The friar haciendas and the lands and livestock of Spaniards were taken
over. Leading the seizures were the dispossessed landless families, the
kasam and tulisan. The latter went back to the towns, some of their leaders
becoming officers in the rebel forces. Lastly, the war produced numerous
evacuee families, among whom were rich inquilinos and traders who had
homes in the capital. These flocked to Cavite and other provinces where the
revolution was strong. The inquilinos were cut off from their landholdings
and the traders from their businesses, and the trade in provisions gave wayto confiscation and requisitioning by the belligerent forces.
The second phase of the revolution just after mid-May in 1898 was
marked by unbroken successes. The nation was finally united when the
revolutionary leaders in the Visayas acknowledged unity with Luzon under
the overall leadership of General Aguinaldo. It was the beginning of the new
planting season, and the dislocation of agriculture and farm labor broadened
and deepened. Civilian movement of goods in normal trade remained at a
standstill. But exultation and resolve supported the proclamation of
independence on June 12, followed by organic laws organizing local
governments and the revolutionary government. The men of the pueblos, who
had been irregular rebel forces, were either absorbed into local militia
commands or mustered into a regular revolutionary army. The pueblo
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governments had to support the local militia, the army, and the revolutionary
government. Since 1896 the rebels had been supported by their leaders from
the local elite. Now the latter's resources were being exhausted by thebreakdown of commercial agriculture and trade. Aguinaldo observed in late
July 1898 that the pueblos are retrogressing with giant strides towards
impoverishment.
Nevertheless, the victorious conclusion of the revolution was announced
by Aguinaldo in mid-September during the opening of the revolutionary
congress in Malolos, Bulacan. A republican constitution was promulgated and
the first democratic republic in Asia was inaugurated in January 1899.
The short fighting in Manila Bay between the US navy and the wooden
Spanish warships had no immediate effects on the economy. Manila was
spared; it was delivered to the Americans in August after a negotiated mock
assault. The Americans held only Manila and a few points allowed them by
the besieging Filipinos, pending the peace negotiations in Paris. In the peace
treaty of December 1898 Spain ceded the entire archipelago to the United
States. The port of Manila had been reopened in mid-August, but the
environs were occupied by the Filipino forces, and exports until December
were below a third of the 1895 level.
The Christian Filipino-American War covered all of Luzon; in the Visayas
the main fighting was in Samar and Leyte, Cebu, and Panay and Negros.
This was the most costly of the wars.
The major engagements during the first phase of the war were fought
from the suburbs north of Manila through northern Luzon. Pitched battles
were fought at battalion- and regiment-strength from February until
November, ravaging the rich corridor along the railroad from north ofManilato Pangasinan.
The strength of the Filipino army was concentrated in this theater and
suffered crippling losses in this type of war. At this point the Filipinos shifted
to guerrilla warfare, with the rest of the war moving to the south of Manila,
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the Bicol, and the Visayas.
The guerrilla phase evolved into a people's war; the guerrilla units were
sustained and supported by the folk of the pueblos, including those under
enemy occupation; the people paid taxes to the local governments organized
by the occupying enemy forces, as well as to the guerrilla shadow
governments.
The United States president McKinley had assured the Congress in
December 1899 that the US army was merely quelling a small Tagalog
rebellion in the islands. After he was assassinated in 1901 the three-year old
affair was an embarrassment to the new president; the American troops in
the islands exceeded the normal peace-time strength of the US Army. The
tactic that the US Army adopted in order to stop the guerrilla war in Luzon
was marked by incredible atrocities. It began with the herding of the entire
population of Laguna and Batangas, about 300,000 non-combatant men and
women and children, in concentration camps in each pueblo of the two
provinces starting on Christmas Day, 1901. The people from the barrios had
to haul their food and provisions, poultry, and anything else they could carry,
to a designated cramped area in the pueblo. The US Army burned or
destroyed houses, crops and backyard plants, animals, plows, fishing boats,
etc., left behind in the barrios; any Filipino crossing the lines was to be shot.
The purpose of the camps, referred to in the American documents as zones of
protection, was to cut off the guerrillas from the services and supplies they
received from the pueblo folk. As the planting season drew near, Gen. Miguel
Malvar, commanding in the military zone south of Manila, foresaw the
imminent starvation of his people; he surrendered in April 1902. In July, the
Americans declared that the Tagalog rebellion was suppressed.
But the war was not over, and the US Army had to wage a pacification
campaign. In 1903, to deal with the guerrillas in Albay in the Bicol, itherded the entire population of the province into concentration camps. In
1905, it was the turn of the people of Batangas and Cavite to go into the
camps. The US Army war against non-combatants ended the people's support
of the guerrilla forces in Luzon. In the Visayas in 1906 five US Army
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battalions occupied Leyte; this finally brought the long war to a dose.
The Moro Wars began in 1899 when the US Army occupied Mindanao and
Sulu on the strength of the Treaty of Paris. (The Americans tried to impose
the cedula on the Muslims.) The Muslim mode of fighting began with an
ambush or raid on an isolated enemy troop or patrol, after which the
Muslims, under their datus or sultan, would retire to a stronghold or cotta.
The warriors and their women and children, numbering many hundreds or
more than a thousand, would await the enemy and make a last stand. They
would be pounded by hours or days of artillery fire before the hand-to-hand
fighting.
The principal engagements in this kind of war were in Kudarangan and
Laksamana in Cotabato (1904 and 1905), and in Bud Dajo and Bud Bagsak
(1906 and 1912) in Sulu. The fall of Bud Bagsak marked the end of the Moro
Wars. There was no significant cultivation sector in Mindanao and Sulu, and
the main effect of the war on the economy of the region was the paralyzation
of the Jolo trade.
Economic Dislocation and Population Loss
The money costs to the US Army of its wars in the archipelago areofficially reported at $169,853,512 from mid-1898 until July 1902 and
$114,515,643 thereafter until June 1907. These figures do not include costs to
the US Navy. An independent civilian estimate of the cost of the Islands to
the United States during approximately the same period is $308,369,155 and
confirms the official report.
It is not possible to make a similar reckoning of the cost of the wars to the
Filipinos. The dislocations and losses since 1896 produced crises that endured
into the next decades. The severest dislocations were in pueblo agriculture,
the base of the predominantly agrarian society and economy. On hectarage
under cultivation, the Census of 1903 report adopted the Spanish estimate of
2,827,000 hectares of farm lands in 1896. A more careful estimate by James
A. Le Roy, a former staff member of the early US occupation government, has
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the area under cultivation in 1896 at just over 4,000,000 acres or about
1,660,000 hectares, with the actual area cultivated in 1903 at 3,250,000 acres
or about 1,315,000 hectares. These numbers point to a 20 per cent loss, some345,000 hectares of cultivated farms idled between 1896 and 1903.
The carabao, the Filipino draft animal, virtually disappeared, harnessed
for years in the army supply trains or slaughtered for food, with the survivors
vulnerable to rinderpest and surra due to prolonged and strenuous overwork.
The surviving carabao stock in 1902 was officially estimated at only 10-15 per
cent of the 1896 population. The depleted stock made the rise in the price per
carabao, from the prewar P20 to P200 in 1902, academic.
The rice harvests were now only 25 per cent of pre-war output.
Misfortunes aggravated the crises as locust plagues ravaged the Visayas
crops in 1901 and the Luzon harvests in 1902. Drought in 1903 brought the
locusts to almost all the provinces. Food shortages led to malnutrition and
lowered resistance to epidemic diseases such as cholera. The 1903 tally of
102,109 deaths due to cholera was believed to have accounted for only two-
thirds of actual deaths. The Census of 1903 report suggested without
corroborating evidence that the epidemics were the major cause of the
population losses since 1896.
The occupation regime coped with the crises with emergency measures.
Part of an emergency relief fund of $3,000,000 voted by the US Congress in
1903 was used for the import of carabaos from China for the partial
replenishment of the carabao stock. Locust boards were organized in the
provinces and towns. Bounties were paid out to distribute cash to the people,
and thousands of tons of the pest were killed. The plagues lasted throughout
the decade after 1900.
The long history of rice price controls by Philippine governments beganduring this era of food shortages. But price controls do not increase supply. In
1900, when the occupation government's effective jurisdiction over territory
and population was still limited owing to the guerrilla war, rice imports cost
$3,113,403. Imports steadily rose as more provinces were occupied and more
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people had to be fed. In 1903 the rice import bill was in excess of $10,000,000.
Make-work schemes were devised to enable the people to pay the discounted
prices of the imported rice.
The population loss due to the wars and war-related factors can be
approximately established. The Census of 1903 report estimated that the
1903 population level of the archipelago had already been reached during the
mid-1890s. The Spanish population estimate for 1894 was 7,782,759; that for
1898 was 7,928,384; and the 1903 census figure was 7,635,426. Despite
defects in the pre-1903 estimates, it is safe to conclude that the equivalent of
the normal population growth during the intervening years, a period when
the average annual growth rate was about 1.5 per cent, had been lost.
There were differential regional- and provincial-level losses related to the
wars. As expected, Luzon suffered more losses than the Visayas. Among the
provinces the loss was highest in Batangas because it was the only province
whose population was herded into the concentration camps twice. Most of the
towns around and east of Manila were guerrilla bases during the war with
the Americans; they were organized as the new province of Rizal in 1901 and
the provincial population data for 1903 indicate that they incurred losses
next only to Batangas. In the Visayas, Iloilo suffered more losses than the
others because it was the main target of the US invasion of the Visayas in
1899 and its resistance was the most stubborn. Losses in the other provinces
were high in Zambales, Nueva Ecija, Laguna, and Bulacan.
The above assessments are based on a comparison of the provincial
population data in the 1887 census (see US War Department, Bureau of
Insular Affairs, Pronouncing Gazetteer and Geographical Dictionary of the
Philippine Islands, 1902) and those in the 1903 census. The 1903 data
moderate the losses in many Luzon provinces because of the inter-provincial
migration during the close of the war with the United States. Indeed thecensus data indicate that Cavite, the heart of the Revolution and a leading
guerrilla base, suffered only a net loss of 274 persons by 1903 - if this were
true, the pre-revolution Spanish estimates understated the population
because they almost certainly did not include the tulisan. The 1903 census
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analysis also avoids, delicately, explicit reference to the wars as contributory
to the population losses. It cites epidemics as the primary cause of the losses
in population; in the cases of Batangas, Rizal, Bataan, and Bulacan itremarks that there was probable out-migration from these provinces to the
capital because of their proximity to Manila.
The Political Economy of the Filipino Republic
The Filipinos had had no formal national and provincial administrative
experience during the Spanish era. Their organizational skills were most
conspicuous in the conduct of the annual fiestas of saints at the pueblo level.There were no guilds of artisans, traders, schoolteachers, or professionals;
there were no farmer associations or labor unions. As with the fiestas, the
practice of management skills in the public sector was limited to pueblo
affairs. The eve of the revolution saw the organization of the secret society
Katipunan; it evolved as a grouping of pueblo or barangay chapters loosely
united at the provincial level with tenuous administrative ties at the national
level; the organizing element was the common aspiration for independence.
Thus, the revolution started without a national political organization. Themilitary organization evolved first. The fighting forces emerged at the pueblo
level as spontaneous units of small farmers and tenants. As in most popular
revolutions in other nations and historical eras, the populist fighting forces
elected their respective leaders from the local upper class, in this case, the
landed elite, inquilinos, planters, and traders. Those who led the largest
units or achieved marked success in the field became provincial and zone
commanders and officers in the central command as the revolution
progressed. When the revolutionary army was formally created in July 1898
it remained a popular army; the men continued to elect their corporals,sergeants, lieutenants, and captains. Majors and officers of higher ranks
were appointed by the central command.
As with the military, the institutional form and operations of the civilian
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government were locally based. The June 12, 1898 independence
proclamation was followed by the June 20 decree prescribing detailed
procedures for the operation of pueblo and provincial governments. It wasonly after the local government foundations were established that the formal
organization of the national revolutionary government was defined in the
decree of June 23.
The decree of June 20 vested the management of pueblo assets and
revenues, including properties left or abandoned by the Spaniards, in each
pueblo head, assisted by an official directly charged with records of taxes and
property. The regulations also provided that all the taxes collected by the
past regime at the local level were to continue, except that gambling licenses
and taxes on cockfighting were abolished, because they cause nothing but
ruin to the pueblos. A head tax of one peseta per quarter (P0.80 per year)
was imposed on all males above eighteen years of age, but the men in the
army, militia, and police were exempted. This was similar to the terms of the
old cedula personal. However, those of the well-to-do class were to be levied
additional imposts to be determined by the central government. Each pueblo
was to have an annual budget. The local treasuries were to remit funds in
excess of local budgetary needs to the provincial governments. The latter
were directed to have their own budgets and were required to send anysurplus funds by the safest and quickest way to the central government.
The essentially local experience of the leaders was manifested in the
philosophy that the primary administration of civil life was to be exercised at
the popular level of government, while the central government would exercise
basically policy and unifying functions. In practice, the national political
aspirations of the leaders was manifested in the rule that higher socio-
political principles would emanate from the central government in the form of
guides to administration.
In the crucial matter of the friar haciendas and lands abandoned by
Spaniards that had been taken over by the folk of the pueblos, these were
declared national property and those who held them in the course of the
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revolution were deemed lessees. Assessments were imposed on the latter,
initially at the rate of half of the old rents. This was the first time ever in
Filipinas that levies would be collected on land by the government.Thereafter, in order to make the haciendas more productive, it was decided to
place the lands under the management of the biggest property holders in the
pueblos.
Also for the first time, and partly to rationalize the revenue system, duties
were imposed on the coasting or domestic trade, whether by railroad, or by
sea or river - the Manila-Dagupan railroad was under Filipino control.
In October 1898, the treasury secretary reported that the P0.80 head tax,
and the assessments on the rich, were being collected. But he stressed that
total revenue collections fell far short of needs. He recommended that the
Chinese capitation tax, earlier suspended owing to sympathy on the part of
the Chinese for the revolution, be collected. This was not immediately
approved, but the farming out of licenses for opium establishments was
decreed in November.
There were other efforts to increase revenues, as well as to reduce
expenses from the central treasury. Pueblos where military facilities such as
hospitals were located, or where troops were stationed or temporarily campedin transit, were made to defray their maintenance costs from pueblo funds.
The pueblo residents made spontaneous contributions of livestock, rice or
money in these cases. Provincial governments were urged to vote
contributions to the war effort: for instance, in December 1898 Isabela
province voted a P100,000 contribution.
Cost-cutting by the central government was exemplary. The
implementation of the pay schedule for the army, adopted in July, was
indefinitely deferred. The 1899 budget (infra) incorporated the pay schedule,but the costs of the war with the Americans forced the government to
authorize payments only of subsistence allowances; this meant that most of
the officers had to continue supporting their men. Salaries of military and
civilian officials of high rank were made subject to the availability of funds.
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The poverty of most the pueblo folk made it impractical to burden them with
imposts, aside from the P0.80 poll tax paid in quarterly P0.20 payments
prescribed by the regulations of June 20.
As for the rich, it must be borne in mind that their contributions in money
and in kind had been up to then mostly unrecorded. The first step towards
regularizing the accounting of these contributions was the brief reference in
the June 20 regulations of assessments on the well-to-do based on ability to
pay. As the system developed, the assessments were treated simultaneously
as war contributions on the payer's side and as borrowings on the
government side. This was detailed in the decree of November 30, 1898.
The preamble of the decree stated that the money contributions by many
individuals in support of the nation's cause were from savings intended for
the -future of their families. The government was therefore morally bound
to guarantee their restitution at some future time. The mechanism was that
of a domestic loan, for the time being in the amount of P20,000,000. Bonds or
notes were to be issued in one, five, ten, twenty, twenty-five, fifty, and 100-
peso denominations; the notes were legal tender. They would bear no interest
until after the recognition of independence, at which time the legislature
would determine the proper rate. The loan was to be secured by all the
property of the nation. After independence, all income from the friar
haciendas, including proceeds of rents and installment payments from lessees
and tenants, were to constitute a fund to redeem the loan.
What is remarkable is that, from June to November 1898, the economic
thinking of the leaders of the Revolution had progressed from simple ideas of
revenue administration at the pueblo level to a bond offering for a
P20,000,000 national domestic loan.
The first budget of the Republic was passed by the legislature andpromulgated on February 19, 1899. The war with the Americans was a
furious two weeks old. The budget, based on a committee study begun the
previous October, not only presents a summary of the finances of the
government, but is also illustrative of the political economy of the Republic.
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Table 1 presents the estimated national receipts and a summary statement of
expenditures by office.
The succeeding budget was accompanied by a similar statement of the
estimated receipts and expenditures at the local government level. The latter
is shown in Table 3, infra, and shows receipts amounting to P826,900 and
expenditures at P704,602. Both budgets reflect the war-time footing of the
nation. The total estimated revenues (P7,261,307) were far below the
P17,474,020 in the previous regime's 1896-1897 budget. The army and navy
appropriations (P4,977,654) made up more than 70 per cent of the total
estimated expenditures (P7,029,331). This was despite the suspension of the
payment of salaries to the higher military officers, who received only
subsistence allowances. This same treatment was followed for civilian
salaries.
Looking at the revenue side of Table 1, among the direct taxes were the
old Urbana and Industria taxes and the Chinese poll tax; these were
temporary taxes, allowed pursuant to Article 94 of the constitution. But the
personal cedulas and the imposts on tribal groups were abolished. The
abolition was due to the government's view that, in the case of the cedulas,
all personal taxation is by its very nature odious; and in the case of the
imposts on tribal groups, that they were contrary to the Republic's holy
ideals of equality and fraternity. The treasury secretary held that the
regular taxes ought to be imposed on the non-Christian Filipinos only when
they participate equally in the benefits enjoyed by other Filipinos.
Consistent with these views, the government also abolished the prestacion
personal, a reminder of colonialism as well as weighing most heavily on the
poor.
The indirect taxes corresponded to the customs office receipts in the
Spanish era budgets. Customs receipts had constituted more than 35 per centof total revenues in the 1896-1897 budget, with import duties accounting for
58 per cent of customs receipts and export duties 21 per cent. Now, all import
duties were suspended; this was because the port of Manila was under
occupation by the Americans, so that the government sought to encourage the
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entry of foreign goods, especially provisions, in the ports under its control.
Moreover, the old consumption taxes on certain goods and services formerly
collected by the customs office were foregone. As for export duties, they wereestimated to produce only a third of the 1896-1897 export receipts.
Of the special and contingent revenues, the major items were the incomes
from: the repossessed friar haciendas; the sale of official paper, postal, and
documentary stamps; the farming out of opium franchises (a vestige of the
old monopolies); and war contributions from individuals and local
governments. The ban on gambling and cockfighting was a deliberate loss of
revenues from old sources, including the lottery.
The largest component of revenues was the emergency war tax, projected
at P4,050,000. The June 20 impost of a head tax of P0.80 annually essentially
preserved the old cedula personal, but the single rate was low. The budget
law abolished this tax due to the general antipathy against it; besides, work
was in progress toward the design of a progressive personal income tax
system. In the meantime, it was decided to replace the head tax with the war
tax, with graduated rate classes based on wealth and income. The latter was
justified as placing the burden of payment on the well-to-do rather that on
the poor because, the budget law said, the poor class has suffered most
keenly the economic crises that the last and present wars have produced, and
... contributes the most men to the armed defense of our independence....
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Table 1. Estimated National Receipts and Expenditures, Fiscal Year 1899*
Receipts
Direct Taxes:
Urbana P 62,223
Industria 622,534
Chinese poll tax 300,000
Railway freight tax
Arrears of taxes uncollected as of end of 1898 32,000
1,016,757
Indirect Taxes:
Export taxes 430,850
Customs fines and surcharges 1,200
432,050
Special and Contingent Taxes:
Court fees collected by State representatives 200
Balances of accounts
Return of former years
Profits from drafts drawn by private persons from one
treasur u on another 500
Post office box rentals 100Sale of printed books and of the "Heraldo Filipino"
(the government newspaper) 3,000
Unclaimed property 1,000
Sale of useless State property
Return of rent
Tax on mines and 10 er cent for the State 2,000Forest products 85,000Coining of money
Sale of lottery tickets, net profits
Sale of stamped paper 100,000
Sale of checks on the State 45,000
Adhesive stamps on drafts and checks 11,000
Ditto for mails, printed matter, sample medicines,
warrants, newspapers, and confiscations 50,000
Adhesive stamps on telegrams 22,000
Ditto for receipts and accounts 10,600
Ditto for signature fees P 16,000Sale of lands and buildings 24,000
Income from convict labor and persons detainedwithin or outside of institutions according to law 2,000
Registry and notarial fees
Rent from State buildings
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
[Table 1, continued]
Income from opium 115,200
Income from property of religious corporations
restored to the State 250,000
Undetermined State revenues 4,500Contributions for war 100,000
P 843,600
Emergency Taxes:
War Tax, until such time as the income tax is imposed 4,050,000
Grand Total P 6,434,407
Expenditures
General Obligations P 281,583
Forei n Affairs 89,040Interior Affairs 203,550War and Navy 4,977,654Treasury 354,380Public Instruction 35,468Communications and Public Works 361,366Agriculture, Industry and Commerce 21,688
Total P 6,324,729
*Based on: John R.M. Taylor, comp., The Philippine Insurrection Against the United States(1971), IV, 317,322-323.
The tax was to be paid by all domiciled persons, Filipinos and foreigners,
at least eighteen years and below sixty years of age, at rates fixed on the basis
of ownership, possession, or management of cash or other property assets, as
shown in Table 2.
As in the Spanish system, commissions totalling P202,500 were
appropriated for the collectors: pueblo heads, barangay cabezas, and pueblo
functionaries in charge of taxes and property.
The local government estimates are shown in Table 3.
The expenditures figures in Table 1 and Table 3 require brief explanation.
The headings in each section are not unusual, except that both the budgets
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
for the national and local governments have allocations for "Public
Instruction:" P35,468 and P302,156, respectively. These two outlays have to
be viewed complementarily. The national government outlay would cover thecosts of sending and supporting ten selected young Filipinos each year for
university studies abroad; the operations of the national university created
by the decree of October 19, 1898; and the operations of special technical
institutions. On
Table 2. Rate Classes of the War Tax*
Class Cash or Property Rate
1st Class. Cash or property assets worth from P25,001 and over P 100
2nd Class. From P15,001 to P25,000 50
3rd Class. From P10,001 to P15,000 25
4th Class. From P5,001 to P10,000 10
5th Class. From P 1,001 to P5,000 5
6th Class. All males not in the above classes i.e., unemployed 2
7th Class. All women not in the above classes i.e., unemployed 1
8th Class. Non-commissioned officers and enlisted men in the
military and assimilated civilian personnel of the same
ranks, sexagenarians, the poor, the disabled, and insane
Gratis
*Source: John R.M. Taylor, comp., The PhilippineInsurrection Against the United States
(1971), IV, Exh. 758.
Table 3. Estimated Receipts and Expenditures at the
Local Government Level, Fiscal Year 1899*
Receipts
Direct Taxes:
Bridges, ferries, fords 5,500
Weights and measures 31,000Fisheries 3,500Carriages, carts, tramways, and horses except
those used in a riculture 50,000
Registration and transfers of livestock ownership 7,000Pounds [for livestock] 1,000
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
Slaughter houses 40,00050 per cent of fees for interments 150,000
P 288,000
Indirect Taxes:
Fees for civil trials P 50,000
Public markets 40,000Lease of municipal property 1,500Theatrical performances, horse races, and other
ublic entertainments 2,000
Licenses for fiestas 500
One untimo (F 0.01) for each pound of beef,
[Table 3, continued]
Receipts
pork, mutton, goat meat, and meat of
other livestock
Undetermined revenues
120,000
4,000
P 218,000
Emergency Taxes:
Fees for registration of:Real property
Births
Deaths
Marriage contracts
P 25,000
94,900
73,000
128,000
P 320,900
Total P 826,900
Expenditures
Public instruction P 302,156Charitable institutions and Health 55,160Public works 50,000Prisons 40,352Leases 52,000Local administration services 173,254
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
Cemeteries 12,680Sundry expenses 9,000Unforeseen expenses 10,000
Total P 704,602
*Based on: John R.M. Taylor, comp., The Philippine Insurrection Against the United States
(1971), IV, 351,424-425.
the other hand, the outlay for the local governments was for the support of
popular education: grade schools, secondary schools, and teacher training
schools, and would be funded from the proceeds of municipal and provincial
government taxes.
Another item in the national government's expenditures budget was the
small amount for the department of agriculture, industry, and commerce
(P21,688). The outlay was small because the war with the Americans was
going on and the department would not be active in the field. The allocation
was therefore scaled down to support limited projects, such as: model farms;
research and experimental stations on seed varieties, pest control and
fertilizers; livestock improvement; and collection of agricultural statistics.
There were two extraordinary elements of the revenue programs. The first
was the national loan project, with a tentative target of P20,000,000 expected
to be raised through subscriptions by the well-to-do. The loan amount was
not specified in the budget, but amounts of P120,000 and P80,000 were
allocated for interest payments and a sinking fund. In retrospect, the project
could not succeed. The cumulative effects on the economy of three years of
war had exhausted the resources of the well-to-do class. In April 1899, it was
officially acknowledged that loan subscriptions were woefully inadequate,
with no improvement in sight.
The other extraordinary measure followed upon the realization of thefailure of the domestic national loan project. This was the project for a foreign
loan of P20,000,000 gold, authorized by the legislature in mid-July 1899. It
was a desperate measure. In late March the enemy had taken Malolos, the
capital of the republic, driving the government to San Isidro and
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
Cabanatuan, Nueva Ecija. In July, it was in Tarlac; here a rump congress
passed the foreign loan act. But the enemy offensive was unrelenting, with
more and more troops coming from the United States. In October, thegovernment moved to Bayambang, Pangasinan. In December 1899,
Aguinaldo remained the president of the republic, but there was no longer a
legislature, cabinet, nor treasury.
All true anti-colonial revolutions aim at national liberation. The kind of
society that results from a successful revolution depends on whether the
spirit of the revolution is marked by egalitarianism or privilege. The Filipino
revolution was fought by agrarian workers jointly with the upper class
element; the latter defined the national political aspirations, social
unification perspectives, and administrative policies.
In practice, the political economy of the Republic was aimed at: (a)
dismantling of the old system; and (b) laying down of new socio-politico-
economic foundations to ensure egalitarianism, and to achieve efficiency
through technology and modernization.
The two goals interfaced. The cedula personal as a head tax gave way to
the war tax based on wealth and property. The war tax was temporary;; in
late 1898, the revolutionary government set up a committee to work on aprogressive personal income tax scheme. The prestacin personal and the
imposts on non-Christian tribes were abolished.
There were three major moves away from the old and toward the new. In
principle: (a) the autonomy and authority of the people to manage their own
affairs and resources through their municipal and provincial governments
was recognized. As concrete moves: (b) taxation of domestic trade was
adopted as rational fiscal and economic policy; and (c) a modern cadastral
system with titling and registration was designed and a land reform policyadopted.
The new approach to land was historically necessary and inevitable. Since
the conquest, the pueblo lands could not be titled to the cultivators; now,
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
many of the fighting men of the revolution came from families dispossessed of
their holdings by the friar haciendas. The dispute that began in 1887
between the inquilinos-tenants and the Dominican owners of the hacienda ofSan Juan de Bautista (whose boundaries embraced the entire pueblo of
Calamba, Laguna) was notorious. The leading pueblo residents were evicted
and exiled without trial to presidios in Mindoro and the Visayas. They had
fatefully proposed a land reform program to the regime, under the guidance of
Jose Rizal, asking that parcels of the hacienda be sold or otherwise conveyed
to those who had toiled to make the land tillable, those who had poured their
substance, labor, and sweat in the land.
The 1899 Constitution settled the issue of the friar haciendas in its
Additional Article which stated that as of May 24, 1898: all the lands,
buildings, and other properties in the possession of the religious corporations
in these islands will be deemed restored to the Filipino State. The
government of the Republic had alternative schemes available to effect land
reform through redistribution of the friar lands.
Beyond land reform and toward a modern land system, rules were
promulgated on February 27, 1899 governing: receiving and processing of
claims to parcels of uncultivated as well as cultivated lands; fixing parcellary
boundaries; adjudicating claims and disputes; and registering the
corresponding titles. This entailed cadastral surveys, title registration and,
ultimately, a land tax that was implicit in the war tax system.
Overall, there was good faith and intelligence in the approach of the
leaders to government and society. They sought to found an efficient new
society by promoting scientific research, disseminating technology, and
instituting a nationwide secular system of public education. These
progressive ideas were contributed by Filipinos who had been educated at the
university in Manila or had come home from university studies in Europe.
But opportunity and time were too short to allow the Republic to
constitute a comprehensive political economy, and to enable it to attain the
fruit of the beginning policies it had adopted.
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AN ECONOMIC HISTORY OF THE PHILIPPINES................................................................................................................................................
Principal Sources
James H. Blount, The American Occupation of the Philippines. Quezon City. Malaya Press, 1968.
Reprinted. Original Edition New York. The Knickerbocker Press, 1913.
Corpuz. The Roots of the Filipino Nation. Vol. 2.
Emilio Reverter Delmas.Rebelin en elArchipielago Filipino. Barcelona. Centro editorial de
Alberto Martin. 1897. Vol. 1.
James A. Le Roy, Philippine Life In Town and Country.
Apolinario Mabini.La Renolucin Filipina, con otros documentos de la epoca. Nos. 4 and 5 in
"Publicaciones de la Oficina de Bibliotecas Publicas." Manila. 1931.
Planes Constitucionales, ccleccion de textos constitucionales ... para infornzacidn de los
miembros de la Asamblea Constituyente. No. 1 in "Manuales de Informacion." Manila.
Bureau of Printing. 1934.
John R.M. Taylor, comp. The Philippine Insurrection Against the United States. Pasay City,
Philippines. Eugenio Lopez Foundation. 1971. Vols. 1-5.
U.S., Bureau of Insular Affairs, War Department.A Pronouncing Gazetteer and Geographical
I}ictionary of the Philippine Islands.
U.S., Bureau of Insular Affairs, War Department,Reports of the Philippine Commission.
1900-1903, in one volume.
1902, Part 1.
1903, Part 2.
1904, Part 1.
1905, Part 1.
1906, Part 1.
1907, Part 1.
U.S., Comisin Filipina. Censo de ... 1903.
U.S., Congress, 55th Congress, 3d Session, Senate,A Treaty of Peace Between the United States
and Spain, Sen. Doc. No. 62, Part 1.
Four Wars; the Political Economy of the Filipino Republic 22
Recommended