[Background]
The Philippines are practically alone among tropical countries in
having, through a fortunate chain of historical circumstances, a
population advanced in civilization and able to become a part of the
complicated organization which modern commerce demands. The business
machinery of collecting the products from the plantations and getting
them to Manila has long been in the hands of Filipinos and in this
they are rarely assisted financially by Americans or foreigners. In
connection with man power, however, there is a problem very difficult
to solve--the scarcity of manual labor--the population of the Islands
being insufficient to till their fertile acres and get their products
ready for commerce. Probably only time can remedy this.
The stability of the Government of the Islands during a time of
growing Filipino participation is a proof to the world that when
the time comes for the government to be entirely in the hands of
the Island's inhabitants, both as to internal and external affairs,
foreign commerce need not fear for loss of credit or trade, due to
any of the great political upheavals which have been so common in
other countries which were once colonies but are now independent.
[Trade Routes]
ECONOMIC POSITION.--Lying within thirty-six hours' sailing from the
port of Hongkong, the Philippine Archipelago bears promise of being
an important distributing center for goods destined for the markets
of the Far East. The ports and harbors have exceptional advantages of
anchorage, and port facilities are easily obtained. The islands are
close to the main trade route between America and Europe, via the
Pacific. They are also close to the route from the extreme Orient
to Europe and to the route from the ports of southern Asia to the
two Americas. Furthermore, they lie on one of the most promising
trade routes between Australia and Asia. Manila, however, is in
competition with such ports as Hongkong, Singapore, Saigon, and
Batavia, which are in most respects better situated especially for
European trade. As regards American bound traffic, however, Manila has
the advantage. Feeder lines are actually operated from Singapore to
Manila and Zamboanga, and from Batavia to the ports of Mindanao. For
goods coming from the United States for the east, direct sailings are
conveniently made from the Pacific coast of Canada to the ports of
the Philippine Islands, where transhipments can be made for any of
the ports of Asia, Japan, India, Singapore, the Dutch East Indies,
and even Australasia.
[Filipino capital]
The port of Manila has now a marine terminal that can compare favorably
with any in the Orient. There are three piers provided with modern
conveniences, and there is a good-sized basin inclosed with strong
breakwater. If the development of the Philippine resources, however,
should in the future proceed as rapidly as the development during
the last decade, and if shipping opportunities generally in the
East are taken advantage of, there will be need for a still larger
marine terminal and for efficient ship-repairing and dry-docking
facilities. But there will always be available sites on Manila Bay.
To emphasize the importance of Manila as a trade center, attention is
drawn to the chart of page 146 where a circle, drawn with Manila as a
center and having a radius of 1,700 miles, will comprise within its
circumference no less than 20 cities of equal importance and would
reach a population of no less than 125,740,711, while a radius of
3,500 miles would make the circumference of the circle reach into the
interior of Siberia and China to the north, all of India and Colombo
to the west, and about two-thirds of Australia to the South.
[Filipino capital]
THE PERSONNEL OF PHILIPPINE COMMERCE.--Before the coming of
the Spaniards, the Filipino people were known traders, their
interisland life leading naturally to a use of the sea as a means of
communication. During the eighteenth and nineteenth centuries trade was
controlled by the Spanish residents. The result of limited Filipino
participation was a disinclination, through lack of knowledge and
practice, to engage in trade, and it is only within the last few years
that Filipino business men have been an appreciable factor. Dozens
of enterprising and well-educated young men are now venturing into
business. Filipino capital has hitherto been invested in great
estates; the millionaires of the Islands with few exceptions have
obtained their incomes from rentals and produce. All that is rapidly
changing; oil companies, shipping firms, and importing houses are
now financed by Filipino capital and managed by Filipino brains;
but Filipino participation in the trade of their country has not yet
assumed commanding proportions.
[Foreigners]
The people of all the great trading nations have established houses
in Manila and have a vital part of the Islands' commerce, transacting
a considerably greater proportion of the foreign trade. Of these,
Americans are, of course, the most numerous, having as a basis the
political bond between the two countries. A large part of these
are ex-Government employees, who saw the opportunities for business
development during their terms of service in the Insular Government.
The British probably occupy second place, though the Spaniards and
their descendants in the Islands are important factors, their houses
handling every branch of import and export trade. The British firms
are for the most part long established, and their trade has the strong
aspect characteristic of British trade the world over. They specialize
in the export of the staples hemp, sugar, and tobacco. The French and
Swiss have houses, which were here prior to American occupation. The
Japanese are a new element; they have of late been invading every
branch of commerce, with increasing momentum. Millions of Japanese
capital are being invested in the basic industries of the Islands,
and each month sees the incorporation of new companies. The post-war
depression, however, has reduced their number and commercial activities
very materially.
AMERICA'S MONOPOLY IN PHILIPPINE TRADE.--The old saying that "trade
follows the flag" has held true in the Islands. At the time of the
American occupation a very small portion of the Islands' commerce was
with the United States; now it is about two-thirds, seven times that
of any other country.
In the beginning, the growth was slow, and what growth there
was, was due to the increasing American civil population. The few
American houses were young and struggling with inexperience and lack
of capital. The older foreign houses, with their branches in the
provincial centers and established clientele, had a very strong hold
on import trade.
[Effect of Free Trade]
In 1909 a tariff law providing for reciprocal free trade between the
United States and the Islands was passed, with a few limitations which
were removed in 1913. Immediately following the passage of this law
American goods sprang to the fore and trade increased threefold from
1909 to 1912, $24,000,000 worth having been imported in that year.
MEDIUMS OF TRADE.--Generally speaking, there are three methods by
which goods coming from foreign countries are brought to consumers
in the Archipelago.
Some manufacturers establish branches throughout the Islands and
sell only their particular line. For others having a smaller volume
of trade various commission and indent houses stand ready to handle
their goods together with other lines. Still other manufacturers
having a large volume of business in the Islands transact business
thru a branch or agent direct without any intermediary.
TRADE WITH OTHER COUNTRIES.--The following table shows the volume
of trade between the Philippines and the other countries of the
world for the years 1917 to 1922:
Countries 1922 1921 1920 1919 1918 1917
Pesos Pesos Pesos Pesos Pesos Pesos
United States 223,699,852 248,973,616 395,012,081 264,288,213 295,932,059 201,710,012
Hawaii 1,199,666 2,404,761 4,310,625 4,584,195 958,872 968,859
Porto Rico 159
Guam 279,929 344,211 223,304 198,134 522,822 208,494
United Kingdom 16,788,965 17,892,548 34,559,572 37,111,249 44,492,810 26,532,640
Austria-Hungary 298,425 353,670 23,305 391 1,633 2,063
Belgium 1,187,310 719,089 812,910 915,390 474 43,606
Denmark 49,800 86,745 103,098 36,667 40,810 87,417
France 4,519,468 7,812,258 5,828,482 11,423,798 4,097,446 4,506,617
Germany 7,934,643 7,429,125 2,787,824 733,882 65,215 321,879
Italy 984,018 469,804 663,707 337,104 378,305 427,312
Netherlands 5,670,345 10,859,875 7,292,425 17,213,031 90,927 176,910
Spain 7,467,255 9,548,425 12,878,951 9,728,135 7,860,335 4,881,013
Norway 124,795 39,105 10,539 37,610 15,475 29,858
Switzerland 1,510,333 1,875,403 1,890,888 1,347,920 1,215,741 1,120,127
Canada 2,320,070 1,236,079 2,007,190 481,439 1,400,341 1,119,188
China 17,786,205 24,054,116 25,915,481 21,884,855 19,652,486 12,839,167
Japanese-China 748,000 317,378 90,597 435,731 221,431 339,971
British East Indies 4,558,247 5,373,683 9,645,447 7,592,592 7,031,771 4,339,107
Dutch East Indies 5,569,494 5,813,437 5,524,312 8,242,028 2,662,846 2,490,819
French East Indies 6,191,832 6,516,898 10,226,884 10,456,432 16,560,839 11,309,048
Hongkong 5,664,825 10,146,269 14,960,216 14,882,990 10,129,983 11,154,093
Japan 28,964,902 35,094,966 47,064,272 37,285,086 42,144,920 31,088,379
Siam 466,336 4,196,598 8,733,450 2,637,467 2,439,348 753,449
Australasia 7,105,550 5,835,955 10,199,782 10,668,854 8,873,767 5,977,807
British Africa 50,936 72,990 145,457 402,018 161,063
French-Africa 35,975
All other countries 348,663 249,812 845,106 384,283 213,776
----------- ----------- ----------- ----------- ----------- -----------
Totals 351,561,885 407,907,793 601,124,276 463,513,756 467,587,387 322,802,674
The values of imports and exports and the trade balance for each year,
from 1913 to 1922, follow:
VALUES OF IMPORTS AND EXPORTS, AND TOTAL VOLUME OF TRADE, SHOWING
BALANCE FOR EACH YEAR, FROM 1913 TO 1922
-------+-------------+--------------+-------------+------------------------
| | | | Balance of trade
| | | +------------+-----------
Year | Imports | Exports | Total trade |In favor of | Against
| | | | Islands | Islands
-------+-------------+--------------+-------------+------------+-----------
| Pesos | Pesos | Pesos | Pesos | Pesos
1913 | 106,625,572 | 95,545,912 | 202,171,484 |----------- | 11,079,660
1914 | 97,177,306 | 97,379,268 | 194,556,574 | 201,962 |-----------
1915 | 98,624,367 | 107,626,008 | 206,250,375 | 9,001,641 |-----------
1916 | 90,992,675 | 139,874,365 | 230,867,040 | 48,881,690 |-----------
1917 | 131,594,061 | 191,208,613 | 322,802,674 | 59,614,552 |-----------
1918 | 197,198,423 | 270,388,964 | 467,587,387 | 73,190,541 |-----------
1919 | 237,278,104 | 226,235,652 | 463,513,756 |----------- | 11,042,452
1920 | 298,876,565 | 302,247,711 | 601,124,276 | 3,371,146 |-----------
1921 | 231,677,148 | 176,230,645 | 407,907,793 |----------- | 55,446,503
1922 | 160,395,289 | 191,166,596 | 351,561,884 | 30,771,307 |-----------
-------+-------------+--------------+-------------+------------+-----------