The Philippine Trade Act, also known as the Bell Trade Act, became law on April 30, 1946, about two months before the Philippines gained formal independence on July 4. It set tariff preferences, fixed the peso's exchange rate to the US dollar, and required the Philippine constitution to be amended to give American citizens and businesses equal rights to the country's natural resources. Critics in Manila denounced it as neocolonial, but postwar rebuilding funds depended on its acceptance.
Philippine independence on July 4, 1946 was billed as a triumphant end to nearly five decades of American colonial rule, but the economic strings attached told a more complicated story. The Philippine Trade Act, also known as the Bell Trade Act, signed two months earlier, locked the fledgling republic into a trade relationship that critics argued perpetuated dependency rather than ending it.
The law tied the Philippine peso to the U.S. dollar and imposed quotas on Philippine exports to American markets, but its most controversial provision required the Philippine constitution to be amended to grant American citizens and corporations parity rights, meaning equal access to Philippine natural resources and businesses, as U.S. citizens.
Manila's legislature, desperate for the reconstruction aid promised alongside the trade deal, narrowly approved the parity amendment amid furious nationalist opposition. Filipino economists and politicians spent the following decades trying to loosen these arrangements, viewing the act as a case study in how formal political independence could coexist with deep economic subordination.
Key people: Harry S. Truman