Note 4 — Its Early History

The Obras Pias (i.e., Pious Works) funds were legacies left exclusively by Spaniards, chiefly pious persons, for separate beneficent objects. Two-thirds of the capital were to be lent at interest, to stimulate trade abroad, and one-third was to be a reserve against possible losses. When the accumulated interest on the original capital had reached a certain amount, it was to be applied to the payment of masses for the repose of the donorsʼ souls.

The peculations of the Gov.-General Pedro Manuel de Arandia (1754–59) permitted him to amass a fortune of a quarter of a million pesos in less than five yearsʼ service, which sum he left to pious works. On the secession of Mexico (in 1819) the Government took over the Obras Pias funds, to control their administration. There is reason to believe that many of the donations were the fruits of the corrupt practices of high officials, the legacies being for their benefit hereafter.

The funds were severally administered by the four boards of San Francisco, Santo Domingo, the Recoletos and Santa Isabel, controlled by one general board of management. In 1850 the Spanish Government, in the exercise of its right (Real patronato) to intervene in all ecclesiastical administrative affairs, ordered these funds to be transferred to a banking establishment entitled the “Banco Español de Isabel II.,” more generally known as the “Banco Español-Filipino” (q.v.). The Obras Pias funds constituted the original capital of this bank. The board, presided over by the Archbishop, still continued to control the manipulation of these funds by the bank, the income derived from the original capital having to be paid out in accordance with the wills of the several founders of the fund. Up to the close of Spanish rule, money was lent out of this fund on mortgages in and near Manila, at six per cent. interest per annum.