Sugar and the Benefits of Free Trade

Sugar cultivation increased in Iloilo, Antique, Panay, and Negros because of:

• the higher prices of directly-exported sugar
• the facility and security of the trade as contrasted with the late monopoly enjoyed by Manila

This led to the development of manufacturing.

In 1857, there were no iron sugar mills on the island. With a wooden sugar mill, only 30% of the sap remained in the cane, even after it had thrice passed through.

The old wooden presses were worked by steam or buffaloes. They have now been replaced by new ones which the native planters easily obtain on credit from the warehouses of the English importers.

Instead of using old Chinese cast-iron pans, they now import far superior articles from Europe. Many large factories worked by steam-power and with all modern improvements have been established.

In agriculture, creditable progress is noticeable.

Improved ploughs, carts, and farming implements generally, are to be had in plenty.

These naturally show how important it was to establish commercial centres at different points where foreigners should settle.

The sudden rise and prosperity of Iloilo would not have been possible without:

• the foreigners
• credit facilities afforded by the foreigners

The mercantile houses in Manila would only trade with unknown planters in distant provinces with ready money, not credit.

In the past, many half-castes traded manufactures bought in Manila for sale to the foreign firms in the provinces. The credit facilities enabled them to send more of their goods.

Both those foreign firms and Chinese retailers were unable to compete with them. This caused them to cultivate sugar, to the profit of themselves and the country.

In this way, important plantations have been established in Negrós, managed by natives of Iloílo. But there is a scarcity of labourers on the island.

Foreigners now can legally acquire property and possess a marketable title. Until very recently, the law was extremely uncertain on it.

Land is to be obtained by purchase, or, when not already taken up, by “denuncia” (i.e. priority of claim). In such case, the would-be possessor of the land must enter into an undertaking in the nearest of the native Courts to cultivate and keep the said land in a fit and serviceable condition.

Should no other claim be put in, notice is thereupon given of the grant, and the magistrate or alcalde concludes the compact without other cost than the usual stamp duty.

Many half-castes and natives do not have the necessary capital for a large plantation. They sell the fields which they have already partially cultivated to European capitalists, who are thus relieved of all the tedious preliminary work.

The Colonial Government now wants to establish large plantations. The lack of good roads is big problem. But, with the increase of agriculture, this defect will naturally be remedied. Moreover, most of the sugar factories are on rivers which are unnavigable even by flat freight boats.

The value of land in many parts of the country has doubled within the last 10 years.

In Jaró (Diario, February, 1867):

• the rents have increased threefold in 6 years
• Cattle which were worth 10 dols. in 1860, fetched 25 dols. in 1866
• Plots of land on the “Ria" in Iloilo, have risen from 100 dols. to 500 dols., and even as high as 800 dols.

Below are the price of a pico of sugar:

These are caused by the sugar trade which has become extremely lucrative through free exportation.

At the end of 1866, there 20 European sugar planters on the island of Negrós, besides a number of half-castes.

Most of them were working with steam machinery and vacuum pans.

The general rate of pay is from $2.05-$3 per month.

On some plantations, the principle of “acsa," i.e. part share, is in operation.

The owner leases out a piece of ground, providing draught cattle and all ploughing implements to a native. The latter supplies the mill with the cut cane, receiving 1/3 of the product as payment.

In Negrós, the violet cane is cultivated. In Manila the white (Otaheiti). The land does not require manuring.

On virgin soil, the cane often grows 13 feet high. A vast improvement is to be observed in the mode of dress of the people. Piña and silk stuffs are becoming quite common.

Advance in luxury is always a favourable sign; according to the increase of requirements, industry flourishes in proportion.

California, Japan, China, and Australia appear designed by nature to be the principal consumers of the products of the Philippine Islands.

Certainly at present, England is the best customer. But nearly half the account is for sugar, in consequence of their own custom duties.

Sometimes, it happens that not more than 1/4 of the sugar crop is sufficiently refined to compete in the Australian and Californian markets with the sorts from Bengal, Java, and the Mauritius. The remaining 3/4 if particularly white, must perforce undertake the long voyage to England, despite the high freight and certain loss on the voyage of from 10-12% through the leakage of the molasses.

The inferior quality of the Philippine sugar is at once perceived by the English refiners and is only taxed at 8 shillings per cwt. Purer sorts pay 10s. to 128.*

In this way, the English customs favour the inferior qualities of manufactured sugar.

The colonial Government did not allow rum to be distilled from the molasses until 1862.

Under ordinary circumstances, the distillation of the rum covers the cost of sugar refining and gave additional profit.

In 1868 and 1869, the sugar intended for the English market cost $15-£16 per ton in Manila. It fetched in London about £20 per ton.

The best refined sugar prepared in Manila for Australia was, on account of the higher duty, worth only £3 per ton more in London. But, being £5 dearer than the inferior quality, it commanded a premium of £2. Manila exports the sugar chiefly from Pangasinan, Pampanga, and Laguna.-(From private information.)