Journal. [1966]

Puerto Galera, Cebu, Jolo-and that it was native traders who took
these goods on consignment from them and bartered them throughout
the islands. In other words, the Chinese then occupied the place which
the British wholesale firms were to occupy in the 19th century, and the
Filipinos, that of the Chinese retail merchants. Nor is it often recalled
that at precisely the same time the men of Manila and Batangas were
trading on their own account to foreign parts; had, in fact, developed
a pattern of triangular trade with North Borneo and the Malay Peninsula; and had gone so far as to establish a trading community in the
Sultanate of Malacca. The disfavor, suspicion, and envy with which
these "Luzon men" were regarded by the Malaccans is perhaps an
indication of their entrepreneurial ability, for it was precisely with the
same disfavor, suspicion, and envy that the Chinese were later regarded
in Luzon.
THE Spanish conquerors adopted the policy of immobilizing the
people of these islands. They were, henceforth, to be a people of
tribute-paying peasants, and were to leave foreign trade to their masters
and domestic trade to the Chinese. The policy was enforced because
the Spaniards had the military power to eiforce it. Accordingly, the
Filipinos ceased to be traders; a nation of seamen, they turned their
backs on the sea. Yet not all, for Spanish power never succeeded in
subjugating for any length of time the proud Muslim principalities of
Magindanao and Sulu. These Filipinos, because they retained their
freedom, were able to continue the maritime tradition which is our
common heritage. They continued to share with their Indonesian
cousins the carrying trade of Southeast Asia, specializing in that particularly prbfitable commodity, Visayan slaves; and in the intervals of
fighting the Spaniard sold pearls, molasses, and tobacco to the now
earthbound rustics of Samar and Bohol.
The privileged position accorded the Chinese by Spanish policy
was immensely strengthened by the British, French, and American
import-export houses that established themselves in Manila after the
opening of the Philippines to world trade. These firms found in the
principal Chinese merchant families, with their affiliates in practically
every town of consequence in the archipelago, a ready-made marketing
system, and quite naturally channeled their business almost exclusively
through them. Against this sort of organization the independent native
trader clearly had little chance of survival; and even this little was
further diminished by the fact that he could get no credit. A Spanish
law, intended in the beginning to protect the untutored indio from
rapacious money lenders, set as the maximum limit of the credit that
could be extended to him the magnificent sum of twenty-five pesos.
NEVERTHELESS, there were not wanting Filipinos sufficiently foolhardy to challenge the system and, what is even more unforgiveable, to beat it. If you have ever been to Taal, you may perhaps have
wondered, looking up at its towering church, what fit of madness possessed the old Augustinian missionaries to build so large a church for
so small a town. This, you might have said, is the kind of massive pile
that the prosperous burghers of some medieval city would have raised
in thanksgiving to God for blessing their trading ventures. And if you
had said it, you would have been exactly right. For Taal was not always
so small a town; in the early 19th century it stood in the center of a
region where the people had no need of Chinese traders because they
were themselves traders, bringing the products of their own farms and
looms in their own ships to the Visayan islands, and taking in from
thence abaca and sugar for the schooners lading in Manila Bay.
This was after a more liberal colonial government had lifted to
some extent its ban on the Filipino's freedom of movement within his
own country. Once again he took to the sea, not as a rating in the
Spaniard's galleons but in his own ships, ships he designed and built
himself. Master carpenters whose fathers and whose fathers' fathers
had served their apprenticeship in the Cavite Navy Yard now set up
on their own, in Pangasinan, in Caraga, and elsewhere. Soon they were
building ocean-going ships that Lloyds of London did not hesitate to
rate A-i, and a frigate turned out by the Pangasinan shipwrights was
commissioned by the Spanish Navy for service in European waters.
All the metal work on these ships was manufactuied here in smithies
that had been casting church bells and bronze artillery for centuries;
only the sheet copper for sheathing hulls was beyond them because
they did not have the equipment for it. As for the great sails that
16

gave these vessels wings, they were woven from Ilocos cotton on Ilocos
looms.
We were, in fact, getting to be pretty good at this business of
building sailing ships. It looked as though we had found an industry
perfectly suited to our genius and our needs as an island people. And
just about that time, the first steamboats butted into Manila Bay
against the wind.
OMETHING of the sort happened to textiles also. The decline and
eventual discontinuance of the Manila-Acapulco galleon trade,
which dealt, as everyone knows, chiefly in Chinese textiles, gave an
opening at least in the domestic market for locally manufactured cloth.
To meet the demand, hand looms sprang up in Pampanga, Bulacan,
Camarines, Iloilo. Baliwag began to export hats to the Americas,
Lucban and Mauban mats to Europe. In Iloilo, family looms were
expanding into veritable workshops, with ten and twenty weavers
working to patterns drawn by a master designer. The French consul at
Manila wrote home that while French printed cottons could more than
hold their own in the market, he despaired of effecting an entry in
the luxury trade; for Philippine fashions were so fickle that no sooner
had he sent the designs ot the latest fancy in flowered skirts to Paris
than the local manufacturers had already met the demand.
Matters were developing in this highly satisfactory way in the
local textile industry when the machine-made products of Manchester
and Birmingham broke like a flash flood into the markets of Asia, and
the hand loom followed the sailing ship into the lumber rooms of
history.
THESE considerations are not offered as an excuse for failure. They
are offered simply to make the point that if we failed it was not
for lack of trying. It was not diligence, nor ingenuity, nor enterprise,
nor the willingness to take risks that was wanting in our fathers. We
might say, perhaps, that their timing was poor. They got themselves
all tooled up by the middle of the 19th century for producing for the
markets of the middle of the 18th.
We may console ourselves with the reflection that we started late
and that we have been steadily catching up. The economic, social,
political, and technological gap between us and the West, enormous
in the 16th century, has been reduced in the 20th to almost manageable
proportions. This is no small consolation.
B UT is it consolation that we need? Is it not rather stimulus? The
entrepreneurs of the 19th century could afford to fail, perhaps;
the entrepreneurs of today most certainly can not. We are now a nation
of 30 millions, as compared with 3 in 1800 and 7 in 1900; and we have
one of the highest rates of population growth in the world. Moreover,
we are now an independent and sovereign republic, or at least we are
considered such both by ourselves and others. We must now make our
own decisions and must take the full consequences of the decisions we
wrongly make, or weakly make, or cravenly fail to make. We no longer
have a mother country or a colonial master to blame for our shortcomings; we only have ourselves.
The gap that our fathers narrowed we must now bridge; and we do
not have much time. We must do it by what another nation,
much larger but somewhat similarly situated, has called "the great leap
forward". Only, we have an entirely different idea of how to make that
leap. We have chosen to make it not by regimentation but by free
enterprise; planned and disciplined enterprise, to be sure, but still
recognizably free. We perceive, in short, that the leap must be made,
and that we need some sort of stimulus to make it; but we prefer that
this stimulus should take the form not of a bayonet behind us but of a
carrot before us.
This is our problem. And as if it were not difficult enough, it is
further complicated by the fact that we must supply the carrot ourselves.
How have we wrestled with this problem? Have we got it with its
back to the canvas, or is it about to spin us out of the ring?
AT the end of World War II we were faced with the enormous task
of rehabilitating a ravaged economy at least to the extent that
would enable it to keep us alive. We were faced, at the same time,
with the task of restructuring that economy, because, even undamaged
it was not a very satisfactory one to begin with. Our performance was,
on the whole creditable, at least as far as rehabilitation is concerned;
but I think it must be admitted that we indulged ourselves in what
6 THE JOURNAL OF THE AMERICAN CHAMBER OF COMMERCE
April, 1966