Extracting Benguet Gold: The Colonial Origins of
Property Rights for Major Stakeholders in the Philippine
Mining Industry
Karl Friedrik Poblador
Department of History, College of Social Sciences and Philosophy,
University of the Philippines Diliman
The Philippine mining industry contributes a very insignificant share to the
country’s GDP despite the implementation of the Philippine Mining Act in
1995. A major goal of this legislation is to attract foreign investment into the
mining industry while ensuring that the state receives its equitable share
from the extraction of its mineral resources, and it undoubtedly follows
a template which was developed during the American colonial period for
the very same purpose. Unlike agricultural lands, which until this day are
largely owned by local elites, the awarding of property rights pertaining
to mining on what were mostly public lands were part of a colonial design
which worked to the advantage of American business interests. Although
the transition to self-government by the Filipino political establishment
during the Commonwealth Period altered this policy environment, large
gold mining corporations, led by the Benguet Consolidated Mining Company
continued to prosper and remained among the largest taxpayers to the
Philippine government, despite nationalist opposition and resistance from
indigenous communities. While this historical precedent demonstrates
how national interests could be reconciled with the economic gains from
the extraction of the country’s mineral wealth, it must be noted that strong
governance is a huge factor which led to the implementation of mining
policy, and is major element of concern for all stakeholders until this day.
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Extracting Benguet Gold: The Colonial Origins of Property Rights for Major
Stake- holders in the Philippine Mining Industry
Karl Friedrik Poblador
Department of History, College of Social Sciences and Philosophy,
University of the Philippines Diliman
I have a nugget of gold picked up in its present form on the banks of a Philippine creek. [Beveridge holds up
a rock.] ...And this wealth is but a small fraction.1
Around two minutes into Senator Albert J. Beveridge’s speech to the U.S. Senate on 09 January 1900, he mentioned
one of the most tangible gains that America could derive from its occupation of the Philippines: access to its vast
mineral resources. In reality, however, the lack of capital and security of property rights proved to be a dilemma
for the 1,200 prospectors, mostly American soldiers, who went out to live among the indigenous people and seek
their fortunes mostly around what is now the Mountain Province.2 In order to prevent said miners from gaining
political control in the region, the Taft Commission3 enacted Act No. 48 on 22 November 1900 to establish the civil
government in the province of Benguet. While it may have had noble intentions as far as colonial governance was
concerned, it was a harbinger for the disenfranchisement of the indigenous peoples from the political process. Over
the next two years, the colonial government would put in place a policies through which the mineral resources of
the Philippines could be exploited. Although market conditions and capitalization were the ultimate determinants
of gold mining activity,4 the institutional template by which the motivations of stakeholders in the mining industry
could be maximized would be set this early on, and would persist well into the present era.
Major Turning Points in the Legal Context for Gold Mining
One of the first bills passed by the colonial government was Act No. 253 for the creation of the Bureau of NonChristian Tribes (BNCT). Led by Dean C. Worcester, it was mandated to conduct ethnographic research among the
un-Hispanized peoples of the Philippines, and to “report upon the practical operation of all legislation” as applicable.5
Although this institution had effectively disenfranchised the indigenous peoples from the political process,6 the
property rights issue of American miners was only partially resolved when the U.S. Congress acted on the colonial
administration’s need for a mining law, and passed the Philippine Bill of 1902, otherwise known as the Organic Act.
Enacted on 01 July 1902, the major sections of this bill provided a framework for colonial administration, (such as a
bill of rights as well as the creation of a bicameral legislature) which would include an elected assembly. Significantly,
the bulk of this bill defined the policy for the allocation of mineral resources under the colonial regime. Section 21,
for instance, outlined the guidelines for the exploitation of mineral lands:
That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and un-surveyed,
are hereby declared to be free and open to exploration, occupation, and purchase, and the land in which
they are found to occupation and purchase, by citizens of the United States, or of said Islands: Provided,
that when on any lands in said Islands . . . . mineral deposits have been found, the working of such mineral
deposits is hereby forbidden until the person, association, or corporation who or which has entered and is
occupying such lands shall have paid to the Government of said Islands such additional sum or sums as will
make the total amount paid for the mineral claim or claims in which said deposits are located equal to the
amount charged by the Government for the same mineral claims.7
The remaining sections of this document (22 to 65) further defined the guidelines for the actual disposition of
property rights on mineral lands. Accordingly, gold mining companies complied with the regulations under
a freehold system, in which a claimant was given a possessory title to enable him to do development work on
his claim and apply for a patent of ownership for both Filipinos and Americans.8 In the years that followed the
commodification of public lands at the expense of ancestral claims was reinforced by a string of legislative acts,
such as the Special Provincial Government (SPGA) which placed ancestral lands and peoples at the direct hands
of American colonial officials, even after the establishment of the Philippine Assembly in 1907. But this business
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environment, however, would be affected by a major shift in the policy environment for gold mining emerged in
1934, when the enactment of the Tydings-McDuffie Act set the stage for the eventual withdrawal of the United
States from the Philippines. A provision of this Act was the election of delegates to a convention for the drafting of
the Constitution, which was certified by President Roosevelt, and subsequently ratified in a national plebiscite. It
was very similar to the American Constitution, except for its adaption of a Regalian Doctrine which would have
major implications on American gold mining. Incidentally, this would be the time at which gold mining activity
would be at its peak due to the high prices of gold in the wake of the Great Depression, particularly after President
Franklin D. Roosevelt gave the United States Treasury permission to buy gold at market prices on 21 October 1933.9
By the end of 1935, there would be 57 gold mining companies listed on the Manila Stock Exchange, compared to
only six at the start of 1933,10 and they all faced a challenge as far as their property rights were concerned.
Article XIII, section 1 of the 1935 Constitution struck a nationalistic tone as far as gold mining and timber licensing
was concerned:
Section 1. All agricultural timber, and mineral lands of public domain, . . . belong to the State, and their
disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to
corporations or associations at least sixty per centum of which is owned by such citizens, subject to any
existing right, grant, lease, or concession at the time of inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploration, development or utilization of any of the natural resources shall
be granted for a period exceeding twenty-five years, renewable for another twenty-five years . . . 11
As expected, gold miners attempted to influence policy in order that the property rights they enjoyed under colonial
rule would be upheld, and John Haussermann, the biggest American gold miner in the Philippines, sought the
intercession of Governor-General Frank Murphy to support a law that would grant ownership to mining companies
that had been in operation before the inauguration of the Commonwealth Government.12 A series of political
maneuvers which followed led to the passage of the Mining Act of 1936, which effectively upheld the property rights
of Haussermann’s Benguet Consolidated Mining Company as well as Don Andre Soriano’s Antamok Goldfielfd,
but at the same time also brought in disproportionately higher tax revenues for the Commonwealth government.13
This type of environment, in which the motivations of the State and big mining corporations would determine the
policy environment for mining in the Philippines, would persist until the advent of the war in the Pacific and would
be revived after the departure of the colonial regime, while the rights of the indigenous peoples would continue to
be undermined, particularly because The Commonwealth Constitution, which was in use until 1973, did not carry
any policy on ancestral domains.
The Implementation and Execution of Colonial Law on Gold Mining and the Impact on Indigenous Peoples
As the interests of gold miners such as Haussermann were threatened by the Regalian doctrine of the Commonwealth
Constitution, it was inevitable that conflicts pertaining to property rights would arise out of this nationalist stance.
For instance, his Balatoc operations had staked a 22-hectare claim in 1915 and applied for a patent survey in 1932,
but the Commonwealth government refused to have one issued. This was used as a test case by the Solicitor General
of the Commonwealth (P. Tuazon) who used this case to express a nationalistic effort to repossess all unpatented
American mining claims. As expected, the miners put up a legal stand on the grounds that the Commonwealth could
not deny a patent as they were not involved in the contract on claim that had been made under the Philippine Bill of
1902. Ultimately, President Manuel L. Quezon expressed his opinion on the Balatoc case in a 1937 press conference
by toning down the nationalistic overtures and conveniently leaving the final decision to the courts. While this case
may have demonstrated the primacy of government in the allocation of property rights over corporate interests,
it is very apparent that indigenous communities were not considered as stakeholders as far as gold mining was
concerned.14
Since the onset of American rule, the colonial experience brought about a conflict between indigenous and colonial
property rights regarding the concept of ‘ancestral lands’. A test case for colonial mining law was reported in 1907,
in which a certain Jose Fianza, a supposed heir to 183,000 square meters of mineral lands which had been worked
on by his grandfather Toctoc and father Dominguez for over 50 years, challenged John F. Reavis, who had claimed
that he had been developing abandoned land in good since 1901. Although the lower court affirmed the claim of
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the plaintiffs based on section 45 of the Organic Act, an appeal to the United States Supreme Court in 1909 ruled in
favor of the defendant.15 While it is apparent that the plaintiff in this case may have been representing his personal
property rights rather than that of the indigenous community, there had also been accounts of local resistance
around the Mountain Province.
During the gold mining boom of the thirties, operations expanded smoothly in the Itogon area around Baguio, but
that was not the case in the rest of the Mountain Province, where the Igorots had permanent communities on their
ancestral lands. This put them at odds with mining companies, which considered their ancestral lands as public
domain which was open to exploitation, thereby resulting in local resistance out of the fear that acid run-offs from
mining operations would affect their rice fields and terraces. For instance, a crisis erupted in Bontoc in 1933 when an
Igorot woman was injured while attempting to wrest a crowbar away from a prospector. Although she only suffered
cuts and bruises, her village put up a defensive stance which gained sympathy from Governor William Dosser,16 and
eventually leading to a policy by Governor General Frank Murphy to ban gold mining in certain areas and to form a
committee to investigate the legality of mining activities in areas occupied by indigenous communities.17 As a result,
mines were only developed in areas where the locals were more cooperative, in the hope that opposition would be
reduced once they experience the benefits from the industry.18 In fact, when Suyoc Consolidated (an operation
owned by Jan Marsman) opened along the Bontoc Road, initial opposition was defused after the mine started using
local employees and a thriving community had sprung up.19
Interestingly, the reaction of the local communities in Bontoc took a different tone under the Commonwealth
administration. When indigenous communities moved to oppose government-sanctioned exploration in the
Bontoc region, Secretary of the Interior Elpidio Quirino tried to impress upon them that their ancestral domains
were property of the State, and even blamed the colonial governors for entertaining their ancestral claims. The
Igorots remained defiant against the encroachment of mining companies, and a crisis occurred in which armed
warriors set out to ambush gold prospectors by using naked women as bait within the clearings of mine claims.20
While local resistance succeeded in keeping mining companies out as the gold boom eventually died down around
1937, it seemed like the Commonwealth administration was not very sympathetic towards upholding the property
rights of the indigenous peoples.
Conclusions
The Regalian Doctrine enshrined in the Commonwealth Constitution is still preserved in the 1987 Constitution,
it is the State which still has the final say with regards to the disposition of ancestral lands as shown in Section 2,
Article XII:
Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain.21
As this provision was perceived as a threat to corporate mining and resulted in the dormancy of the mining
industry, the Philippine Mining Act of 1995 was enacted and reissued in 2004 in an effort to in an effort to revive
the mining industry. While this policy marginalized indigenous peoples from state-sanctioned exploitation of
mineral resources, implementing it in conjunction with the Indigenous Peoples Rights Act of 1997 (IPRA) should
have guaranteed their property rights and allowed them to have a say on extraction of mineral resources within
their domains.22 However, a close look at the IPRA would show that it does not really enforce the property rights
of indigenous peoples over the natural resources within their ancestral domain as it merely gives them the “right
to claim ownership,” and clearly does not renounce the Regalian doctrine.23 Given this existing framework for the
exploitation of the country’s mineral resources, it is apparent that only two stakeholders are party to all transactions
– big corporations and the State. In the case of the latter, the Constitution actually provides varying degrees of
intervention on the part of Congress or the President to enter into agreements with “qualified corporations” and
small scale miners in so far as the exploration, development and utilization of natural resources are concerned.
Today, the indigenous Ibalois continue to mine for gold on their lands under a system of property rights granted
by indigenous laws without the knowledge of the State24 due to institutional framework for the allocation of
property rights which has persisted since the colonial era. Although the Regalian doctrine enshrined in the
present Constitution grants exclusive rights over public lands to the State, the indigenous peoples will always be
at a disadvantage as far as the mining is concerned, and it is unlikely that benefits from the industry will trickle
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into their communities as long as they are placed outside the transactional environment between the State and
the large mining corporations.
Notes
“U.S. Senator Albert J. Beveridge speaks on the Philippine Question, U.S. Senate, Washington, D.C., January 9, 1900.”
UCLA International Institute. 10 December 2004. Web. 21 February 2014.
2
Bureau of Insular Affairs.
3
Led by William Howard Taft, The Taft Commission was the second such commission (after the Schurman Commission)
which were tasked to recommend colonial policy over the “Philippine Islands”.
4
Karl. K. Poblador, “The Gold Mining Boom of the 1930s and Transition to the Commonwealth Mining Policy”
(master’s thesis, University of the Philippines, 2009).
5
Act No. 253
6
Owen J. Lynch, Colonial Legacies in a Fragile Republic: Philippine Land Law and State Formation With Emphasis on the
Early U.S. Regime (1898-1913) (Quezon City: University of the Philippine College of Law, 2011), 245.
7
The Government of the Philippine Islands, Department of Agriculture and Commerce, Division of Mineral Resources.
Brief Description of the Philippine Mining Laws, Rules and Regulations (Manila: Bureau of Printing, 1933), 2.
8
Ibid., 6.
9
“President Roosevelt Aids Gold Mining Here,” American Chamber of Commerce Journal 12 (August 1933): 14.
10
“Business Value of the Philippine Gold Mining Industry,” American Chamber of Commerce Journal 15 (October
1936): 9.
11
1935 Constitution of the Republic of the Philippines, art 8, sec. 1.
12
Jose E. Romero, A Chronicle of My Life, Times and Contemporaries (Quezon City: Almar-Phoenix Publishing House,
Inc., 1979), 51.
13
“Statistical Data on the Philippine Mining Industry.” American Chamber of Commerce Journal 19 (July 1939): 34.
14
Quezon. Press Conference, 12 October 1937, Quezon Papers, Philippine National Library, Manila.
15
Lopez, 65-66.
16
“Rice Terraces or Gold Miners?,” Philippines Free Press (20 January 1934), 8-9.
17
Howard T. Fry, A History of the Mountain Province (Quezon City: New Day, 2006), 178-82.
18
Ibid., 182-3.
19
“Bontoc Mining Opposed.” American Chamber of Commerce Journal 15 (May 1935): 23.
20
Fry, 186.
21
1987 Constitution of the Republic of the Philippines, art 12, sec 7.
22
Mark Kristopher G. Tolentino, “Critique on the Implementation of the Regalian Doctrine.” Attorney Mark Kristopher
G. Tolentino, 2012, accessed 06 February 2015. http://www.marktolentinolaw.com/legal-blog/critique-on-theimplementation-of-the-regalian-doctrine.
23
Ibid.
24
Melanie G. Wiber. Politics, Property and Law in the Philippine Updlands (Ontario: Wilfrid Laurier University Press,
1993), 105.
1
About the Author
Prof. Poblador finished his bachelor’s degree in economics at the University of the Philippines Diliman (UP) in 1988,
at worked for fifteen years in the field of sales and marketing for major corporations in the Philippines and Hong
Kong. He completed his MA History degree at UP in 2012. He wrote a theses about institutions and property rights
during the early years of aviation in the Philippines, and continues to write articles and present papers on the history
of Philippine economic institutions. His areas of interests include extractive industries, public transportation, and
fiscal policy dating from the era of the Galleon Trade up to the Philippine Commonwealth Period. His most recent
paper was about the application of Physiocratic precepts to the eighteenth century Philippine agrarian economy, which
was presented at a conference in Sydney, Australia. He is presently writing annotations and commentary to recentlyreleased documents obtained from the Archivo General de la Nación in Mexico about contraband on the ManilaAcapulco Galleon Trade as part of a project team supported by the National Historical Commission of the Philippines
(NHCP). He is presently an Assistant Professor at UP, where he is in the process of completing his PhD in History.
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