How globalization and trade created the Philippines

(published in Billionaire, December 2010)

One interesting thing about all those discussions regarding trade and globalization is how they actually created a country. Not shaped or influenced or changed its course but actually created. And the Philippines was that country.

Really, when one looks at the Philippines, there is nothing about it that has not come about due to globalization and trade: the prevailing religions, its language, its attires and costumes, traditions and ethics and etiquettes, its food, its form of government, literature, music, movies, sports. In other words, it is
a mix of Christian or of Muslim faiths (with a touch of animism thrown in), of a Republican government, of English or Spanish speech, of Asian, American, and Spanish cuisines, of fiestas, of rock and pop, of a people of mixed descents, of Hollywood and basketball. The Philippines, simply put, is the true child of globalization. Notably, the last time Filipinos ever really got together as a nation was when Manny Pacquiao, a Filipino who practices a sport invented in the West, fought and beat up a Brit, in the United States, through live television broadcasted through a combination of Japanese, American, and German technology.

Rice mix

Of course, not everybody would be happy with that. I once went to the National Museum’s Rice exhibit and saw its take on the “kaingin”. According to the exhibit, the kaingin was not the harmful practice that it actually was but only became so because of the demands of “the land hungry and increasingly globalized commerce”. That comment, to put it politely, was interesting.

Never mind the fact that the Philippine population increased because of better diets, better access to better medicines, better medical attention, better access to better communications (in case of emergencies). If ever kaingin became phased out as an agricultural method it was simply because it inefficiently dealt with the demands of a growing society and of change. And change - like death and taxes - is a constant and certain thing in life. Globalization doesn’t really create change, it merely offers it.

Changes demand innovation and creativity, which then breeds more changes, and so on. Changes in life patterns, culture, politics, science, philosophy, and even religion, are inevitable. Globalization doesn’t necessarily create those changes. It just makes the products of change a whole lot more accessible to a whole lot more people.

Indeed, by the exhibit’s logic, people should use horse drawn carriages and not cars (a foreign invention). Or people should start making their own clothes by needle and thread, instead of buying them from malls. Or write using pens instead of tapping away at computers. And write by candlelight (ala Rizal) and not through fluorescent. But the problem is that even such old fashioned alternatives are all products, one way or another, of globalization.

In any event, as we shall see, Filipinos should be the last people on earth to treat globalization and trade as villains. In fact, globalization and trade are the true parents of the Philippines.

A silken trade

The thing started when Magellan arrived in (not discovered) the Philippines in 1521. Due to his incompetent preparation, he was promptly killed by Lapu Lapu in the battle of Mactan. The seeds of Spanish colonization, however, was already set and, upon the founding of Manila in 1579, the Spaniards easily beat off American or other European efforts at sericulture due to the Spanish’s access advantage to South China.

As William J. Bernstein reports (in his excellent A Splendid Exchange, Grove Press, 2008):

“… two ships [in 1565] from another Spanish expedition – one under the command of Alfonso de Arellano, and another, two months later, under Friar Andres de Urdaneta – became the first ride the west-to-east system across the northern Pacific in the course of their twelve-thousand journeys from Manila to Acapulco.”

“These two ships were the forerunners of the annual ‘Manila Galleon.’ Once a year, a treasure flotilla from Mexico, usually consisting of two large merchantmen, weighed down with silver and guarded by a heavily armed galleon, ventured westward along the equatorial route, pioneered by Magellan, to Manila. The silver was exchanged for oriental luxury goods, mainly high-quality Chinese silk, which had been brought in junks from the southern coast of the Ming Empire to the Philippines, and then shipped on the Manila galleon east to Acapulco.”

“Trade diasporas soon formed around the Filipino-Mexican trade in silk and silver. Silk merchants from both the Philippines and Mexico crossed the Pacific to establish trade colonies. Those who had settled in the Philippines, called Manileños, struck first, sailing east to Mexico and making vast middleman profits from their warehouses in Acapulco and the capital.”

The volume and value of the Manila galleon trade can perhaps be best seen from the fact that, as Bernstein notes, that the viceroy in Mexico City even petitioned Spain (unsuccessfully) to have the Manila galleon trade be “forbidden entirely.”

An offer one can’t refuse

This is not to say that globalization and trade does not have a dark side. Far from it. Writing for the Financial Times (9 August 2008), Hugh Carnegy notes that:

“What is striking is that for much of history, trade was built on conquest and often violently enforced monopolies – not least when Europeans were involved. The urge to ‘truck, barter and exchange’, as Adam Smith described it, is all very well. But until recently, the much stronger urge was to grab and control by force the trade in goods needed either for basic economic and military needs or for the accumulation of wealth. Even what Bernstein calls the Pax Islamica – some seven centuries of Arab supremacy that established a settled and sophisticated trading empire from the east Mediterranean to the Far East – was built on naval supremacy and bold military action. This ended in 1498 when Vasco da Gama sailed round the southern tip of Africa to reopen European access to the Indian Ocean and beyond. ‘Free trade’ was hardly his aim: he was a greedy, religious bigot prepared to rob, murder and kidnap to get his hands on the spices and other exotica that would make a fortune for him and his Portuguese masters.

Brutality was a vital element in the development of trade and the successive empires built upon it – Roman, Arab, Mongol, Spanish, Dutch, British – culminating in the 18th- and 19th-century slave trade. Equally compelling is the sheer doggedness, courage and skill that characterised the pioneers of trade. Vasco da Gama set sail in 1497 with three tiny ships; they didn’t see land for 95 days as they battled round the Cape of Good Hope;”

Indeed, as Nick Joaquin's book Manila, My Manila makes clear, far from the idyllic scene pictured in museum diorama’s, the day "the Manila of Soliman became the Manila of Legazpi", 19 May 1571, emphasized military might. That day Miguel Lopez de Legazpi took formal possession of Manila by holding his sword in his hand and yelling "in a voice of fury, 'I have founded the City of Manila in the name of the King. If there be any there who would challenge this, let him come forward and I will measure my sword with his.'"

By that time, of course, Rajah Soliman had been soundly beaten. It must be remembered though that our repeated colonization weren’t brought about due to any moral or intellectual superiority or even due to the benignity of any foreigner but because simply the Philippines had not much use for and thus not much good at organized violence. When one looks at it, another thing, really, for the Philippines to be proud of.

‘Pistaym’ and the independence movement

In any event, globalization and trade, having driven the colonization of the Philippines, eventually fueled its independence because by
the late 1920s and the early 1930s, the campaign for Philippine independence was nudged along by the fact that a lot of Philippine exports to the United States - through then existing free trade arrangements - were beating American domestic products.

Philippine sugarcane produce, cigars, coconut oil, cordage, and labor were causing worry to American domestic industries (particularly beet sugar, cottonseed oil, dairy, and cordage industries). American businessmen were therefore forced to "encourage" their US Congress to grant Philippine independence or at least grant it autonomous status, for which higher tariff rates (or quotas) could then be imposed on Philippine products.

As Carlos Quirino writes (in Quezon: Paladin of Philippine Freedom):

“In an effort to lighten their financial misery [under the Great Depression], American interests hurt by the competition of Philippine products increasingly supported the proposal to give the islands their independence. Dairy, cordage, cottonseed oil, and domestic sugar interests appeared before Congressional committees on tariff and asked for either the limitation of duty-free insular products or the abolition of all tariff concessions.” “[However], but as long as the Philippines remained a possession of the United States, a great majority of Americans themselves realized that they could not impose unfair restrictions on the Filipinos.”

Of course, it could be looked at in two perspectives: that its "comparative advantage" in the aforementioned export industries helped the cause of Philippine independence or it was American protectionist attitudes that did.
Either way, Philippine participation in international trade in the 1920s and '30s helped it achieve independence.

Giving as good as it gets

That should be it then, this little meditation on how globalization and trade created the Philippines. Instead, an interesting fact (from Wiki, of all places) popped up:

“The first Austronesian speakers are believed to have originated on the island of Taiwan x x x [From there] settlers landed in northern Luzon in the Philippines. x x x their descendants started to spread south to the rest of the Philippine islands, Celebes (modern-day Sulawesi), northern Borneo, Moluccas (modern-day Maluku), and Java.

The settlers in Moluccas sailed eastward and began to spread to the islands of Melanesia and Micronesia between 1200 B.C. and 500 B.C. respectively. Those that spread westward reached Sumatra, the Malay peninsula and southern Vietnam by 500 B.C.

The oceanic Austronesians had reached Remote Polynesia by 1000 B.C and spread to its three extremities Hawaii by 400 A.D. New Zealand by 1300 A.D. and Easter Island between 300 A.D. In the Indian Ocean they reached Madagascar.”

From the above one can see that it was the Philippines that gave a number of countries the basis for their language and perhaps culture. And then something should also dawn upon the reader – the implications of which are clear and the significance clearly inspiring: for while indeed globalization and trade created the Philippines, the Philippines also created globalization and trade. While the Philippines could not have existed were it not for globalization, the same could also be said that globalization could not have happened without the Philippines. From the galleon trade, to involving the US in the Philippine’s war of independence against Spain, to its trade with a United States dealing with the Great Depression of the 1930’s, to its vital strategic importance in World War II, to being the first Christians in Asia, the first in Asia to have a democratic form of government (not to mention the first in Asia to have an airline), the first to give the world a bloodless form of revolution in People Power advocates, and to our continuing enrichment of the world through our OFWs, overseas managers, workers and nurses, the Philippines keeps giving to the world and the world keeps on becoming the better for it.

Policymakers have always thought that so the world goes, the Philippines will eventually follow. However, perhaps there is a corollary to that thought. After all, the Philippines, the first and true child of globalization, has become, through its language, history, culture, and psyche, the very epitome of globalization itself. So while indeed where the world goes so goes the Philippines, perhaps it would be also be a safe bet to say that where the Philippines goes so goes the world.