Thursday, September 21, 2006


This landmark building (now owned by the GE Money Bank) located on the corner of Plaza de Santa Cruz and Ongpin Street was once home to the oldest savings bank in the Philippines, Monte de Piedad and Savings Bank. It 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, but 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.

Additional source:

The Chinese in Philippine Life 1850-1898
By Edgar Wickberg
Ateneo de Manila University Press


Labels: , ,

posted by Señor Enrique at 11:04 AM


Blogger Iskoo said...

what a trivia. dont have idea about banking history.

nice architecture of the buikding, hpe they can preserve that.

September 21, 2006 3:33 PM  

Blogger ipanema said...

Wow, I didn't know all of that. Another informative post, Eric. Thanks for sharing.

September 21, 2006 4:17 PM  

Blogger Nick Ballesteros said...

It is indeed ironic to think that the Chinese were once hard pressed. And now, look where they are.

Very interesting story of the Spanish, European, and American influence in our industry. And BPI! I did not know that. Thanks for sharing!

September 21, 2006 5:04 PM  

Blogger Señor Enrique said...

I also hope they would never demolish this landmark, Iskoo. We don't really have much left in Manila.

September 21, 2006 5:16 PM  

Blogger Señor Enrique said...

You're welcome, Ipanema.

I was actually inspired to post this upon noticing the unbelievable amount of banks in Binondo, especially along Dasmarinas Street behind Escolta. I knew they were there to serve the Chinese community who are very active in various commerce. But I wanted to know more about the bank industry's inception into our local history.

September 21, 2006 5:21 PM  

Blogger Señor Enrique said...

Their perseverance and determination, Watson, ought to inspire our countrymen who are economically-strapped to develop similar skills so they could improve their lot.

September 21, 2006 5:26 PM  

Blogger Sidney said...

Great history lesson.
You like China town, don't you ! ;-)

September 21, 2006 8:39 PM  

Blogger Señor Enrique said...

Yes, Sidney, besides my home, it was in Chinatown I spent most of my growing up years in Manila because of my father.

But be that as it may, I feel short-changed because these historical entries I have been posting reflect that which was not taught to us in school.

What's worse is that I attended MIT's high school division in which almost half the student body was of Chinese descent; however, none of the Chinese contributions in our local history was ever discussed in any of our history classes. Embarassingly, it is only now that I'm learning about their overall significance in Manila's (and the entire country's) culture and economy.

September 21, 2006 9:09 PM  

Blogger Amadeo said...


Address in Plaza Cervantes is No. 4

And here’s a little history of BankPI:

BTW, a little insider trivia:

The bank does not want to be known as BPI, essentially because that acronym also stands for Bu. Of Plant Industry. Rather officially, it wants to be called BankPI or simply, Banco, its telegram address.

And one more:

During that big earthquake in the late 60’s, part of the façade of that Plaza Cervantes bldg moved about an inch or two, noticeable only from the inside because of the cracked floor. So, one wonders if that bldg was allowed to be used soon after that. But it definitely was a landmark building site, as gleaned from its history.

September 22, 2006 12:41 AM  

Blogger Señor Enrique said...

Many thanks, Amadeo. I might be able to trek over there this weekend.

Are you sure they still do not want to be referred to as BPI? Reason I ask: their signage distinctly indicate BPI all over the city. There may no longer be a Bureau of Plant industry.

I will ask if No. 4 Cervantes has been abandoned since the earthquake. Was that of the Ruby Tower fame?

September 22, 2006 5:54 AM  

Blogger Amadeo said...


Re use of BPI, I noticed that too, but only with the affiliates. Thus, BPI-Family, or BPI Remittance, etc. But not with the bank itself. But would be good to find out with the present crop of employees how this tradition is viewed. When employed with the bank, one can’t help but be immersed and imbibe a very distinct culture, most definitely borne out of its long and colorful history.

And yes, it was the Ruby Tower earthquake.

Another suggestion, this time on the human interest angle, what about writing about the residences of these famous families who own these famous buildings/businesses?

First, are there tours (like Carlos’) focusing on where they live, much like the ones for Beverly Hills celebrities?

To illustrate, Mayor Lacson was mentioned and his family used to live in a rather unique plot of land, on the fork of the road giving it a triangular shape. It was along Earnshaw St. (or was it Blvd?) in Manila. Another familiar to me was George Ty’s on Forbes. Used to be the residence of Earl Carroll, original head of PhilAm Life. The Lopezes (Eugenio) had a large estate around the Manila-Pasay boundary, visible from Roxas Blvd. Even met on old gentleman here in the US from the Visayas, who used to be the driver of the patriarch and was brought to the US precisely for that purpose.

Would be interesting to find out where the younger Ayala siblings live. I have seen one around Makati. Met him at a dentist’s office. No, not personally, but just that we had the same dentist. You bet, I did not choose that dentist again.

And the pagoda arch that marks the entrance of Chinatown resembles very much the one in San Francisco, and I suppose in any Chinatown around the US and the world. And in size and influence, the Chinatown in SF can decently compete with the one in the old homeland.

September 22, 2006 6:37 AM  

Blogger Señor Enrique said...

Amadeo, I guess, best to do is somehow find a long-time employee of BPI to provide insight on its current culture.

I love the idea of featuring residences of these famous families, or if not their main residences, their favorite second homes (I'm a big fan of Architectural Digest magazine). Even a profile of their grown up children would be interesting (much like the NY Times' article on Warren Buffet's three children -- unbelieveably so down-to-earth).

But I can see a major hindrance in manifesting this: I am not affiliated with a major broadsheet or broadcast media. In short, I lack the credentials to be trusted enough to be allowed to photograph their inner sanctum. I had been away for too long from Manila and thereby lost many "connections."

No, Carlos doesn't offer any such tours; however, Ivan Mandy does with the San Miguel mansions (near Malacanang). I had signed up for his next tour.

September 22, 2006 7:05 AM  

Blogger Gayzha said...

Hmmmm... it's always good to know where the bucks end. Almost the backbone of society :) More on this topics please!!!

September 22, 2006 9:53 AM  

Anonymous Anonymous said...

Another informative post. It really is good 'cause I get to learn more about the histories in Philippines.

Man, Eric, you can become a history teacher anytime! Heehee.


September 22, 2006 10:59 AM  

Blogger Señor Enrique said...

Hehehe .. okay, Jase, you asked for it :)

But isn't that something? We do have a rich history!

September 22, 2006 11:29 AM  

Blogger Señor Enrique said...

History teacher? You are too kind. Kyels!

I'm barely scratching the surface here; playing catch up with history lessons I never had. Seems like the more I know, the less I know ... hahaha.

But I do enjoy sharing whatever I dig up, and that makes reading more enjoyable because I have others to learn with.

Thanks, Kyels!

September 22, 2006 11:34 AM  

Anonymous Anonymous said...

I was going to say what Kyels did. You're gonna make one great history teacher. :)

September 22, 2006 11:54 AM  

Anonymous Anonymous said...

No, really Eric. You can be a good teacher!

You know a lot about Philippines; in my opinion, and that is great, really.

Yes, sharing with others is a nice thing and oftentimes you get to know some unknown things too!


September 22, 2006 1:19 PM  

Anonymous Anonymous said...

Pardon my ignorance, but why couldn't the Chinese borrow from the obras pias?

I spent a few moments looking the jeepneys in the photo. You just don't see those in Boston :-)

September 22, 2006 1:22 PM  

Blogger Rey said...

I like history and was quite well aware of The trading history of manila. But this one is highly detailed and very on the spot to its very location, then broadening to the sysytem and events that took place at such an era.

Thanks for this info, eric. Your blog has become a great source of focal history and has now evolved to a history- relevant site with that personal touch you're so adept of using with.

i only got nothing but admiration for this.

September 22, 2006 1:27 PM  

Blogger Bryan Anthony the First said...

glad i learned something today


September 22, 2006 3:42 PM  

Anonymous Anonymous said...

Hi there,sachiko here..thanks for dropping by my blog. :)

You have nice photos here,i'm impressed with the shots and clarity and the posts very informative,it's been ages since i last went to binondo,escolta,chinatown too.the tikoy pics made me craved for them,aahhh!

About the jazz entry,reminds me when i used to go to "birds of the same feather" in q.c to watch tadao hayashi..

September 22, 2006 6:26 PM  

Blogger Señor Enrique said...

To Irene and Kyels,

Not that I don't know how to accept and appreciate compliments when it's given, but really, I'm barely learning all these aspects about our local history myself. My perception of a history teacher is a guy in tweed jacket who can easily throw accurate dates, eras and epochs at you as if talking about his local neighborhood. I'm nowhere near that ... hehehe.

But THANKS just the same! I'm glad you're enjoying all this information, too!

September 22, 2006 7:09 PM  

Blogger Señor Enrique said...

Although the Chinese were already acive traders in Manila long before the Spaniards' arrival, the Spaniards' relationship with them was always questionable, Aurea.

For the most part, they were often regarded as overseas workers and at one point, were not even allowed to travel and settle anywhere outside of Binondo.

They were heavily taxed, too, because they were mostly entrepreneurs, not farm workers, which the Spaniards wanted them to be (to develop farmlands and grow certain crops for export).

And even though they were given a parcel of land (Binondo) to live in outside of the walled city, the canons of Intramuros from across the Pasig River were aimed at them in case of unruly group behavior.

I will expand on this further on my ensuing posts. Very colorful part of our history, indeed!

September 22, 2006 7:19 PM  

Blogger Señor Enrique said...

Thanks, Rey. Actually, I have to edit out certain details so as not to create too long an entry that might turn off some readers. I do, however, list my sources and provide links for further exploration, so to speak, for those interested.

I do appreciate the compliments, Rey. They inspire me to do better :)

Thanks again!

September 22, 2006 7:22 PM  

Blogger Señor Enrique said...

I'm glad, too, Bryan. Will be posting more! Thanks!

September 22, 2006 7:23 PM  

Blogger Señor Enrique said...

When I saw your list of Zeppelin songs, Sachiko, I just had to say hello. I get excited to seeing young people who are enjoying the music I was very much into :)

I have got to start exploring the local jazz scene. And that's the reason I bought that Pinoy Jazz Tradition book.

You know the tikoy comes in assorted flavors nowadays, right?

September 22, 2006 7:27 PM  

Anonymous Anonymous said...

Once a great, a nice, informative post Senor. Looks like Manila's business history largely evolved from the Binondo - Sta. Cruz areas. To think that they have been overtaken by Makati is rather sad but the area is so cramped that it was impossible to expand to meet the demands of the economic activity in the 60's.

September 24, 2006 4:49 AM  

Blogger Señor Enrique said...

And come to think of it, BW, the Binondo-Sta. Cruz area is mostly inhabited by our local Chinese merchants.

Yes, I agree, and what happened to Manila's financial enclave is now happening to Makati City.

September 24, 2006 7:56 AM  

Anonymous Anonymous said...

Thanks for the detailed answer, Eric :-)

September 25, 2006 3:21 AM  

Anonymous Anonymous said...

When you said young people,did you mean me,eric? haha,if yes,i'm flattered but fyi,my eldest kid is 21. :)

i stopped ageing after 30..mind,heart and soul..hopefully the body,too. haha!

September 25, 2006 11:16 PM  

Blogger Señor Enrique said...

My pleasure, Aurea!

September 26, 2006 6:08 AM  

Blogger Señor Enrique said...

Wow, Sachiko! And I was just enjoying your entry about Tokyo's largest dance club -- I wanted to comment, but afraid to be perceived as an old geezer trying to be hp ... hahaha! But that club sounds fun :)

I really thought you were no older than 25. Cool!

September 26, 2006 6:12 AM  

Anonymous Anonymous said...

hi, i was looking for a group site of the former employees of monte de piedad when i came upon yours that made me nostalgic about the good old days of monte de piedad and savings bank and being a part of it from 1991 until it was bought by keppel bank and then ge money bank.

anyway, by any chance are you related to senor abad, the one who translated the bank's books of accounts from spanish to english?

i am just curious....

February 03, 2008 12:06 AM  

Blogger Señor Enrique said...

Hello gi2!

No, have no relation with Senor Abad.

Thanks for dropping by :)

February 04, 2008 5:00 AM  

Blogger Shalori said...

Senor Enrique, my name is Stephanie Carroll-Ritter. I am Earl Carroll's daughter. We had two residences during our years in the Philippines. The first was at 6200 Dewey Blvd right next door to the old ABSCBN station and across the street from the old Senator Osmenas home. In about 1962 or 63 we moved to Forbes, 62 Cambridge Circle. We lived there till my father left Manila at the insistent urging of his friends because of the rumor Pres Marcos was going to commence martial law.
After living several years in San Francisco, my father returned in 1975 and decided he wanted to "come home" to his beloved Philippines which he did soon after. He died in 1982 and is buried there by his wishes. He lived in the Philippines for over 40+ years. I am very happy he is still remembered.

June 09, 2008 7:58 AM  

Blogger Señor Enrique said...

Hello Stephanie!

Many thanks for your visit and for leaving us a note. It is indeed an honor. A cousin had a career in the life insurance company that your father headed here in the Philippines.

Do you still visit Manila or basically just stay in the States nowadays?

June 10, 2008 1:56 PM  

Anonymous bingcas said...

i love your blog; i love your photos. i find them very poetic even as they are informative. very inspiring.

June 21, 2009 11:59 AM  

Anonymous Anonymous said...

I use to work here in Accounting Department in late 70's where it use to be called Monte De Piedad and Savings Bank and the President at that time was Wilfredo Miranda.

April 10, 2011 2:36 AM  

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Life in Manila as observed by a former New Yorker who with a laptop and camera has reinvented himself as a storyteller. Winner of the PHILIPPINE BLOG AWARDS: Best Photo Blog in 2007 and three Best Single Post awards in 2008.


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