four wars: the political economy of the filipino republic

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.

Four Wars; the Political Economy of the Filipino Republic 1


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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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[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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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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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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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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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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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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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.

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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.

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four wars: the political economy of the filipino republic

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