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The foremost aim of Spanish colonization was to spread Christianity. This was attested by the last will and testament of Queen Isabella, by the Catholic spirit of the laws of the Indies, by the apostolic labors and achievements of missionaries and by the actual result of Spain's more than 300 years of colonial work.

The second aim of the Spanish colonizers was economic wealth. This aim rose from the keen struggle among European nations to control the right spice trade in the orient. Magellan and other navigators blazed their ways across the pacific to secure spices and oriental wares for the Spanish crown.

The third aim of Spanish colonization was political grandeur. by acquiring the Philippines, Spain emerged as a mighty empire whose frontier comprised both hemisphere.

COLONIAL ADMINISTRATION

For over 333 years, the Philippines was a crown colony of Spain. Until 1821 when the Mexican's revolted and won independence from Spain, the Philippines was a dependency of Mexico, being administered by the viceroy in the name of the king. From 1821 to 1898, the country was a distinct government unit under the direct control of the home government in Madrid. The king issued cedulas for the administration of the colony and appointed a governor, member of the royal audiencia and other high officials.

THE GOVERNOR-GENERAL

At the top of the centralized government established by Spain in the country was the governor, who presents the king of Spain. He was appointed and removed from office by the king. He exercised great powers-executive, military, judicial and religious. In his capacity as governor, he had the right to control and supervise administrative offices, and appoint officials not named by the king. He was president of the royal audiencia or supreme court; and he was in charge of ecclesiastical matters, as he assumed ecclesiastical authority over church, office and missions.

THE ROYAL AUDIENCIA

The first royal audiencia was created in 1583 in order to assist the governor-general and to protect the people from the abuse of the officials. It was composed of the governor-general as the president , three justices, a prosecuting attorney and other officials. it was abolished in 1589 when the governor general and the justices had quarrels and misunderstandings. it was restored 1595 when the presidency was given to a regent instead of the governor. The audiencia was the Supreme Court and ran the government in case of vacancy in the governatorial office.

THE ENCOMIENDA SYSTEM

After the conquest of the Philippines, Legazpi divided the country into parcels, each parcel assigned to deserving Spanish national for administration and care. These parcels including the inhabitants living were called encomenderos. it will be recalled that Lavezares gave Juan de Salcedo a part of Ilocos region as his encomienda as a reward for his outstanding performance in the colonization of various regions.

The encomenderos took care of the economic and spiritual welfare of the natives, like being taught the Christian religion and protected from harm both in their person and property. The laws of the Indies was the basis of the administration of the encmonienda. But the laws were not followed carefully and created many abuse. The people became discontented and complained against the encomenderos. in 1674 the encomienda system was abolished in the Philippines as well as in other colonies.

THE TRIBUTE AND FORCED LABOR

During the days of Legazpi until 1884, the Filipinos paid tribute, a kind of head tax, to Spain.

The rate was originally set as eight reales but was raised to ten in 1602 then to twelve reales 1851. One tribute was equivalent to one family consisting of father, wife and minor children. Every unmarried man over 20 years and every unmarried woman over 25 years paid half of tribute. The natives did not like the way collector collect the tribute and they hated it. The encomenderos made great profits and became rich through the collection of tribute.

The natives became vassal to Spain . Another indicator of this was the forced labor called polo. This was a compulsory for all natives from 16 to 60 years of age. The natives worked in the building and repair roads and bridges, cutting of timber, and working in foundries and shipyards. Those who were forced to work called polistas. a native could be exempted from the polo by paying a fee called falla.

The Filipinos were greatly humiliated because they were never paid for hard work, and they were even grabbed of their rice rations by the officials.

Another burden imposed on the native Filipinos by the colonial authorities was the bandala - the compulsory sale by native farmers of their farm product to the government. Not only were the goods or products undervalued but also in many cases they were not even paid for.

THE GALLEON TRADE

The galleon trade was the early trade between Manila on Acapulco in Mexico, a Spanish colony in America. Asian countries like China, Japan, India, Siam, Moluccas and other nearby Asia Countries brought their goods to Manila. Spanish traders in Manila would export these products to Mexico where they were sold at high profit. These products were shipped to Acapulco, Mexico on trade vessels called Galleons. on the return trip the galleons would be carrying silver coins or silver bullion that the Asian traders wanted.

LOCAL GOVERNMENT

For purposes of internal government, the country was divided into provinces and districts according to the dialects spoken by the inhabitants.

the provinces were called alcadias and the chief executives were called alcaldes mayor. The districts were known as corregimientos under politico - military officers caller corregidors. the alcalde exercise both executive and judicial functions and supervised the collection of tribute in the province. He was appointed by the governor general.

SPANISH PROGRAMS ON ECONOMIC DEVELOPMENT

After the abolition of the galleon trade, Spain started developing programs to promote the economic development the Philippines. The economic programs were meant to make the colony self-sufficient so that it would bo longer be an economic burden to Spain.

Governor General Jose Basco (1178-1789) was the first one to give attention the improvement of the Philippines economy.

Some of the economic programs undertaken from the middle of the 18th century until the end of Spanish rule in 1898 were the following:

1. Development of Agriculture. Gov. Basco made the colony produce export goods that were needed in Europe and America. Silk and cottons textiles were produced to be exported. Basco encouraged the large-scale production of cottons and silk. Large tracts of land in Camarines were planted to mulberry trees to feed silkworms.

the other agricultural products which were produced on a large scale were cinnamon ( spice ) and indigo, a material used for dyeing cloth. To increase agricultural production scientific methods of farming were introduced.

2. Organization of the Economic Society of Friend to the Country

The economic society of friend to the country was organized in 1781 to help Gov. Basco in implementing his economic program. It was composed of people who have knowledge in agriculture, manufacturing, rural development, education and domestic foreign trade.

The economic society assisted the colonial government in encouraging greater production by giving Incentives to outstanding producers. It provided free training weaving to interested person. Capitals were also given to those who attended the training programs. Machinery's were brought from abroad to be used in manufacturing goods. By the last end of the 19th century, the economic society became inactive because the successors of governor general Basco did not give it the necessary support.

3. The Tobacco Monopoly

Upon governors Basco's recommendation the king of Spain ( Charles III ) issued a royal decree in 1780 establishing a government monopoly in tobacco in the Philippines. This monopoly took effect in 1782.

Under the 1780 royal decree, the colonial government controlled every aspect of tobacco in the Philippines. The government determined the plantation site, how much would be planted and harvested by the farmer, and the amount to be paid to the farmers. The farmers could only sell the tobacco to the government. The tobacco would be then be brought to government factories to be processes into cigars and cigarettes and then sold to the public at government fixed prices.

The tobacco monopoly raised as much money for the colonial government. By the middle 19th century, about 25,000 Filipinos worked in the tobacco factories.

But some crooked Spanish official abused their authority. They often cheated the farmers in the payment of the products. Because of this, many farmers were forced to cheat government and produced more than what was required. They hid excess tobacco and sold them in black market.

Because of the abuses in the tobacco monopoly, governor general Fernando Primo de Rivera abolished it in 1882. The tobacco business was given to private firms.

4. The Royal Company of the Philippines

the royal company of the Philippines was established by a Spanish decree in march 1785 in order to develop and promote direct trade between colony and Spain and to develop the natural resources of the country. The company was required to set aside four percent of its profit for agriculture in the colony . Exclusive control of the trade between the Philippines and Spain was given to the company. Goods from the Philippines was exported to Spain tax-free.

The major problem of the royal company was the incompetent officers. This resulted in poor management and the company got big monetary losses another problem which led to the decline of the company was lack of cooperation from the Spanish leaders in Manila who had been used to earning big profits in the old galleon trade. The company was finally abolished in 1834.

Although the Royal Company was a failure, it helped in the further development of agriculture in the Philippines particularly the production of Colonial exports like indigo, sugar and spices.

5. Opening Manila to Foreign Market

When the economic of laissez faire of Adam Smith accepted by many European countries, Spain also adopted this doctrine and opened Manila to foreign trade in 1789. Smith was an economist who advocated the doctrine that nations could become right if they allowed business should bot impose many controls so as to hasten the growth and development of business.

Governor general Felix Berenguer de Marquina encouraged foreign merchants to come and invest in the Philippines. By the middle of the 19th century there were already a number of English, American, German, French, and Swiss trading companies in the Philippines. As a result trade and commerce increased greatly and the Philippines began to experience a period of economic prosperity.

More Philippine ports were established and opened to foreign trade. the opening of the ports of Sual in Pangasinan, Iloilo and Zamboanga, Cebu, Legaspi and Tacloban accelerated the economic growth o the Philippines.

To support the growing trade, the improvements of transportation and communication. International telegraph communication systems was established in 1888 through an undersea cable between Zamblaes and the British Colony of Hong Kong. In 1837, the first domestic telegraph line was opened and the telephone line in 1890.
Samar on March 16, 1521. Magellan was welcomed by two Rajas, Kolambu and Siagu. He named the islands the Archipelago of San Lazaro, erected a cross and claimed the lands for Spain. The friendly Rajas took Magellan to Cebu to meet Raja Humabon. Humabon and 800 Cebuanos were baptized as Christians. Magellan agreed to help Raja Humabon put down Lapu-Lapu, a rebellious datu on the nearby island of Mactan. In a battle between Spanish soldiers and Lapu-Lapu's warriors, Magellan was killed on April 27, 1521.

 Disputes over women caused relations between Raja Humabon and the remaining Spaniards to deteriorate. The Cebuanos killed 27 Spaniards in a skirmish and the Spaniards, deciding to resume their explorations, departed Cebu.

For all its losses, the voyage was a huge financial success. The Victoria's 26 ton cargo of cloves sold for 41,000 ducats. This returned the 20,000 ducats the venture had cost plus a 105 percent profit. Four more expeditions followed between 1525 and 1542. The commander of the fourth expedition, Ruy Lopez de Villalobos, named the islands after Philip, heir to the Spanish throne (r. Philip II 1556-1598).

The Philippines was not formally organized as a Spanish colony until 1565 when Philip II appointed Miguel Lopez de Legazpi the first Governor-General. Legazpi selected Manila for the capital of the colony in 1571 because of its fine natural harbour and the rich lands surrounding the city that could supply it with produce.

The Spanish did not develop the trade potential of the Philippine's agricultural or mineral resources. The colony was administered from Mexico and its commerce centered on the galleon trade between Canton and Acapulco in which Manila functioned secondarily as an entrepot. Smaller Chinese junks brought silk and porcelain from Canton to Manila where the cargoes were re-loaded on galleons bound for Acapulco and the Spanish colonies in the Americas. The Chinese goods were paid for in Mexican silver.

Spanish rule had two lasting effects on Philippine society; the near universal conversion of the population to Roman Catholicism and the creation of a landed elite. Although under the direct order of Philip II that the conversion of the Philippines to Christianity was not to be accomplished by force, the monastic orders of the Augustinians, Dominicans, Franciscans, Recollects and Jesuits set to their missionary duties with purpose. Unable to extirpate the indigenous pagan beliefs by coercion and fear, Philippine Catholicism incorporates a deep substrate of native customs and ritual.

While the missionaries spread through the colony to found their parishes and estates in the barangays, the officials of the civil administration preferred to stay in Manila and govern indirectly through the traditional barangay datu or village chief. Although the traditional kinship organization of the barangay had maintained the communal use of land, the Spanish governors brought with them their feudal notions of land tenure with "encomienderos" and subordinate vassals. The traditional village chiefs became a class of landed nobility wielding considerable local authority. The creation of a priviledged landed-holding elite on whom most of the rural population was dependent as landless tenants introduced a class division in Philippine society that has been the perennial source of social discontent and political strife ever since.

In most villages, the priest and the local "principale" or "notable" represented between them Spanish authority. The "friarocracy" of the religious orders and the oligarchy of the landholders were the twin pillars of colonial society whose main interests were in keeping their positions of authority and priviledge.

The Spanish hold on the Philippines first began to weaken in 1762 when the British briefly captured Manila during the Seven Years' War. In support of the British invasion, the long persecuted Chinese merchant community rose in revolt against the Spanish authority. The Treaty of Paris returned Manila to Spain at the end of the War but with increasing diversion of the China trade to Britain and, even more importantly, with an irretrievable loss of prestige and respect in the eyes of its Filipino subjects.

Spain had governed the colony for two hundred years in almost complete isolation from the outside world. The royal monopolies prohibited foreign ships from trading in the Philippines. After the Seven Years' War, in collusion with local merchants and officials, foreign ships and merchants could ever more easily circumvent the monopolies and enter the Philippine trade.

The colonial government had always operated at a financial loss that was sustained by subsidies from the galleon trade with Mexico. Increased competition with foreign traders finally brought the galleon trade with Acapulco to an end in 1815. After its recognition of Mexican independence in 1821, Spain was forced to govern the colony directly from Madrid and to find new sources of revenue to pay for the colonial administration.