Monte de Piedad at Plaza de Sta. Cruz |
Monte de Piedad and Savings Bank was
founded by Fr. Felix Huertas (de Huerta) of the Franciscan Order with the funds
of the Obras Pias.
Inaugurated
on August 2, 1882, it was originally located at the ground floor of Santa
Isabel College, corner of Arzobispo and Anda Streets in Intramuros. In 1894, it
was transferred to the Roman Santos Building at Plaza Goiti where President
Manuel L. Quezon was at one time employed as clerk.
It was then
moved to this landmark building in
1938 (now owned by the GE Money Bank) located on the corner of Plaza de Santa
Cruz and Ongpin Street. The building was destroyed during the Battle of Manila
in 1945. It was rebuilt in 1946 and resumed operation in 1947. It was
administered by Archbishop of Manila until 1949 when it was incorporated.
Before the 1800s, without any banks in
the Philippine archipelago, anyone with a sizeable venture that needed funding
would have to obtain a loan from the obras pias.
The obras pias were pious foundations
in which two-thirds of their holdings were allocated for the furtherance of
commercial maritime ventures at interest — a voyage to Mexico was 50 percent,
to China 25, and to India 35 — substantially increasing the foundation’s
original coffer. Earnings from such interest rates were then assigned to other
pious and benevolent purposes. A third was generally kept as a reserve fund to
cover possible losses. Among the biggest obras pias was the Hermanidad de la
Miscericordia, established in the late 16th century.
The opening of the Suez Canal largely
contributed to a global economic growth during the decades from 1820 to 1870,
and thereby producing similar significant changes in the economy of the Philippines
as well. With the Spanish government granting shipping subsidies, local
commodities such as sugar, fibers, coffee, and many others were briskly
exported. A dramatic spike in foreign trade in the Philippines emerged as a
result of such bustling commerce.
The British and Americans dominated
the foreign trade in Manila while the local Chinese traders acted as primary
intermediaries between them and the domestic market.
But access to the funds of the obras
pias was absolutely forbidden to the Chinese. Therefore, before 1850, there
wasn’t much capital available for the Chinese communities who were, ironically,
Manila’s astute merchants.
Nonetheless, a number of Chinese
enterprises struggled to remain lucrative. One could borrow at six percent
interest from the Chinese community chests or caja, but the funds were never
large. Outside of the community, individual Spaniards were a source of venture
capital to individual Chinese entrepreneurs during the middle and late
eighteenth century. But everything was more of personal level, nothing
organized and of larger scale. Although there were a few private banking
efforts initiated in Manila during the second quarter of the nineteenth
century, it is not known whether they opened their doors to the Chinese.
However, banking was a key function of
American and European businessmen in Manila. Funds were entrusted with them by
rich families, the Church, Manila entrepreneurs, and even by the native banks
that have slowly sprung up. These funds were then loaned out in the form of
crop advances. But advances were also made to the Chinese wholesalers to help
them dispose of European imports and to buy up produce for export.
Soon thereafter, another source of
funds became available to the Chinese. In 1851, the Banco Espanol Filipino de
Isabel II (later renamed BPI - Bank of Philippine Islands) was founded to
promote the use of savings for commercial investments. Most of the funds from
obras pias were transferred to it and the government added other funds of its
own, turning it into a government-regulated, quasi-official institution.
Although the bank’s first transaction was the discounting of a promissory note
for a Chinese, regular transactions with Chinese merchants were facilitated by
non-Chinese guarantors for a fee.
When Banco Espanol Filipino de Isabel
II would ask the European merchant firms for the names of Chinese businessmen
who were good risks, sensing opportunity, they did not provide the names of the
Chinese jobbers and purchasing agents they did business with. Instead, these
European firms became guarantors for Chinese borrowers from the bank, including
forwarding their payments to the bank, and assuming responsibility for
settlement with the bank in case the Chinese defaulted.
For the Chinese focused on wholesaling
or retailing ventures, obtaining goods on credit was more important than access
to cash loans. Hence, the European and American firms advanced their imported
goods to the Chinese dealers while these dealers, in turn, made their profits
without having to raise the capital to procure the products.
Roman Santos Building at Plaza Goiti where President Manuel L. Quezon
was at one time employed as clerk.
* * *
Additional source:
The Chinese in Philippine Life
1850-1898
By Edgar Wickberg
Ateneo de Manila University Press
* * *
Please note:
I very much appreciate my articles and
photos appearing on fellow bloggers' sites, popular broadsheets, and local
broadcast news segments, but I would appreciate even more a request for
permission first.
Thank you!