Growing numbers of foreign merchants in Manila spur the integration of the Philippines into an international commercial system linking industrialized Europe and North America with sources of raw materials and markets in the Americas and Asia.

In principle, non-Spanish Europeans are not allowed to reside in Manila or elsewhere in the islands, but in fact British, American, French, and other foreign merchants circumvent this prohibition by flying the flags of Asian states or conniving with local officials.

In 1834 the crown abolishes the Royal Company of the Philippines and formally recognizes free trade, opening the port of Manila to unrestricted foreign commerce.