Sangley - Economy

Economy

Most of the sanglays worked as skilled artisans or petty traders. Aside from shopkeeping, the sanglays earned their livelihood as carpenters, tailors, cobblers, locksmiths, masons, metalsmiths, weavers, bakers, carvers and other skilled craftsmen. As metalsmiths, they helped to build the Spanish galleons in shipyards located in Cavite. As masons, they built Intramuros and its numerous structures.

The Spanish gave the mestizos de sanglay special rights and privileges as colonial subjects of the Spanish Crown and as baptized converts to the Catholic Church. They were given preference to handle the domestic trade of the islands and to lease land from the friar estates through the inquilino or lessee system, that allowed them to sublet those lands.

Later, the mestizos de sanglay came to acquire many native lands, chiefly through a legal instrument called pacto de retro or contract of retrocession. In this scheme, a moneylender extended loans to farmers, who in exchange for cash, pawned their land with the option of buying it back. In the event of default, the moneylender recovered the loan by foreclosing the land from the farmer. Many local farmers lost their lands to mestizos de sanglay in this manner.

The Spanish Galleon Trade, tied China to Europe via Manila and Acapulco, Mexico. Acting as a transshipment port, Manila attracted Chinese traders from Xiamen (Amoy) who arrived in armed ships, called Chinese junks, to trade with the Spanish. Chinese luxury goods, such as silk, porcelain and finely crafted furniture, were exchanged for silver from Mexican and Peruvian mines. Twice a year the galleons sailed across the Pacific Ocean from Manila to Acapulco and back. The goods were later taken to Spain via Veracruz, Mexico.

As the Spanish galleons carried mostly Chinese luxury goods destined for Europe, Mexicans called them náos de China (Chinese ships). The Spanish galleon trade was mainly a business affair involving Spanish officials in Manila, Mexico and Spain, and Chinese traders from Xiamen. Very few products originating from the Philippine islands or involving resident domestic traders were part of the highly lucrative galleon trade. It was so profitable that Mexican silver became the unofficial currency of Southern China; an estimated one-third of silver mined from the Americas flowed into China during that period. The Spanish galleons also transported Filipino crew and militia men to the Americas, among which there were many sanglays; Some of them chose to settle in Louisiana, Mexico and parts of present United States, specially California. They were called Manilamen by the Americans and los indios Chinos by the Mexicans.

Apart from the Portuguese-led Macao-Manila trade in the 17th century and the British-controlled Madras-Manila trade in the 18th century, it was mainly the Spanish-ruled Manila-Acapulco trade that sustained the colony for much of the colonial period. When the trade ended with the last ship's sailing in 1815, the Spaniards needed new sources of revenue. With the penetration of the British Empire into the Far East and the successful revolts of the criollos in the Spanish Americas, Catholic Spain quickly lost its position amongst the Western powers.

After Mexico became independent in 1821, Spain took over direct control of the Philippines. It had been governed by the Virreinato de Nueva España or Viceroyalty of New Spain (Mexico). Coinciding with the advent of steamships and the consequent expansion of the global economy, the Spaniards decided to open up the Philippines to foreign trade. As the subsistence economy shifted to an export crop economy, in 1834 the Spanish allowed both non-Spanish Westerners and Chinese immigrants to settle anywhere in the islands. The mestizos de sanglay largely abandoned wholesale and retail trading altogether. They converted their capital into larger landholdings, and cultivated sugar plantations for a commodity crop for the new export market, particularly in Central Luzon, Cebu, Iloilo and Negros. The mestizos de sanglay took advantage of the rapid changes as the colonial economy was integrated into the markets of the Western world.

With the opening of the colony to foreign trade in 1834, Western (chiefly British and Anglo-American) merchants established import/export and financial companies in Binondo. They allied with Chinese wholesale/retail traders throughout the islands. The mestizos de sanglay shifted to the export crop economy by enlarging their plantations devoted to agricultural commodities.

The penetration of British and Anglo-American commercial interests in Manila coincided with the British founding of a network of treaty port-cities in Hong Kong, Singapore and Shanghai. They also expanded the Nanyang trade, previously limited to Xiamen, Quanzhou and Macao. In 1868, the United States and China signed the Treaty of Burlingame, legalizing and liberalizing Chinese emigration, which had been illegal since the Ming Dynasty. This led to a rapid increase in the population of Overseas Chinese traders in the Philippines. Towards the end of the 19th century, the dominance of the British/Anglo-American capitalists and their Overseas Chinese trading partners turned the Philippines into an "Anglo-Chinese Colony under the Spanish Flag".