Cebu is strategically located at the center of the Visayas Islands, which as a group is also the center of the Philippines. Thus, even before the coming of the Spaniards, Cebu had been known already to have trade links not only with its neighboring islands in the Visayas and Mindanao but also with many countries in Asia, like China, Japan, Siam (Thailand), Cambodia, and India. When
Magellan reached Cebu, he was told, for example, of the departure of a Siamese boat from Cebu just four days before his arrival.
Magellan died on April 27, 1521 in the Battle of Mactan in the hands of Lapulapu. His death led to the hasty departure of the remaining Spaniards from Cebu. It took another 44 years on April 27, 1565 for the Spaniards to return to Cebu again under the command of Legaspi. It was from Cebu that the first few galleons sent annually to New Spain came from, starting with the first return trip made by Fray Urdaneta. After spending six years in Cebu, Legaspi finally took Manila in 1571 and made it his new seat of power, replacing Cebu.
Unfortunately for Cebu, the transfer of Legaspi to Manila, curtailed it’s development as a trading center as it was made only to function as an administrative, religions, and military center in the south. When Legaspi took Manila, Chinese and other traders from Asia were more attracted to land their cargos there than Cebu or elsewhere in the country. Goods from China consisted of silk, porcelain, and many other valuable products. These goods along with some valuable products from other parts in Asia comprised the main cargo in the ships that were sent annually by the Spaniards from Manila to Acapulco in New Spain.
Called the galleon trade, the arrangement was very profitable to both the Spaniards in Manila and the Chinese from China many of whom also settled in Manila. But this came at the expense of Cebu and the rest of the country since nothing much of value from outside Manila in the Philippines were loaded for shipment to Acapulco. When the business oriented Spaniards in Cebu complained of this unfavorable trade arrangement, a royal decree was issued on April 23, 1594 allowing Cebu to send one ship a year to New Spain. The number of ships sent from Cebu is not known but one ship was reported lost in the sea in 1597.
This loss and the many restrictions placed in the decree made this venture less profitable for Cebu. Among the restrictions was for Cebu to send to New Spain only beeswax, cotton table clothes, bananas, and other fruits from the province. Dealing in silk and other goods from China was prohibited. The Cebu-New Spain trade ended in 1604, putting Cebu behind in development to Manila for the next 250 years.
Following the closing of the galleon trade in 1815, Manila was declared an open port in 1834. In 1860, Cebu was also opened to all foreign vessels. From thereon, the full recovery of Cebu as a trading center was made.
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