Essays on the Economic History of the Philippines: From Unintended Benefits to the Spanish Empire to the Political Economy of Rice Policy

Franz M. Loyola

Major Professor: John V.C. Nye, PhD, Department of Economics

Committee Members: Noel D Johnson, Mark L Koyama

Carow Hall, Conference Room
July 12, 2019, 10:30 AM to 12:30 PM


In this dissertation, I attempt to explore some of the issues in the economic history of the Philippines that remain relatively understudied by the literature. The first chapter explores the unintended benefits of the Philippines to the Spanish empire. The Philippines was viewed as a significant financial burden to the Spain. The colony did not have the spices or gold that the Spanish conquistadors were hoping to find. And more importantly, through the Manila-Acapulco galleon trade, the colony diverted silver from flowing from the Americas towards Spain. I use data from 1500-1650 on silver production, silver importation and price levels in Spain, and counterfactual scenarios of the amount of silver flowing across the Pacific towards the Philippines to show that the Philippines provided an unintended benefit to the Empire by acting as an inflationary heat sink and preserving the purchasing power of the Crown’s revenue.

The second paper documents and traces the origin of rice importation and protection policies that resulted from the economic transformation of the colony after the collapse of the Manila- Acapulco galleon trade. The weak and incomplete property rights during the Spanish period resulted in the rise of a landed elite that was able to monopolize elected positions during the American period. They were able to achieve this by taking advantage of their patronage relationships and so gaining the ability to influenced national food policy. The intertwining of both colonial legacies made it almost impossible to remove protectionist policies for rice.

Given the rice policies and rice shortages faced by the Philippines during the first half of the 20th century, the third paper attempts to identify the constraints faced in rice production using provincial level data from three censuses (1903, 1918, and 1939). The results have important implications for minimizing food shortages in the country. That is, trade protection of the rice sector and policies aimed at improving productivity of rice farmers may not be enough to promote self-sufficiency in rice that policy makers hope for.