In 1834, some American merchants moved to Manila and invested heavily in business. Two American companies were created – russell, sturgis & Company and peele, Hubbell & Company. These have become two of the main trading companies. Initially, the Americans had an advantage over their British competitors because they offered good prices to Philippine exports such as hemp, sugar and tobacco.  The seeds of the revolution were indeed sown earlier in the nineteenth century, when Spain`s forced isolation of the Philippines was dismantled with the country`s opening to foreign trade and the development of an exporting economy by non-Spanish foreign companies (British, American, Chinese). Revolutionary and liberal movements in Europe and elsewhere, in addition to the persistence of autocratic monk rule, brought about a change in the political climate in the Philippines. The most important event that may have made the revolution inevitable was that of February 17, 1872, when three Filipino priests, leaders of the Movement for the Secularization (de facto nationalization) of Philippine parishes, were publicly executed by garrote on January 20, 1872 for their alleged complicity in a military mutiny in an arsenal in Cavite. By associating them with the mutiny, the Spanish administration found, in the insignia of the Spanish monks, a convenient way to abolish the troublesome priests they considered filibusteros (anyone who manifested radical tendencies) to demand clerical equality with the Spanish monks. The revolution brought down the name of Rizal. He was accused of being linked to the secret militant society.
Accused of sedition, conspiracy and rebellion, Rizal was sentenced to death by commando. The country`s leading intellectuals came from the enlightened middle class. Later, they were called the Ilustrados, which means “scholar.” They also saw themselves as the intelligent branch of Philippine society. From the Ilustrados rose the prominent members of the propaganda movement, who fanned the very first flames of the revolution.  In 1776 the first major challenge to the monarchy in centuries occurred in the American colonies. Although the American Revolution was successful, it was in a relatively isolated area. But in 1789, the French Revolution began to change the European political landscape, ending the absolute monarchy in France. Power passed from the king to the people through representation in Parliament. People from other European countries have also started to ask for representation. In the Philippines, this idea spread through the writings of Criollo writers like Luis Rodríguez Varela, who was called “Conde Filipino” (Count of the Philippines).  This was the first time a settler had called himself a Filipino and not a Spanish subject.
With increasing economic and political stability in the Philippines, the middle class began to demand that Filipino churches be nationalized through a process known as secularization. In this process, control of Philippine parishes should be transferred from religious orders to lay priests, especially priests born in the Philippines. Religious orders or monks reacted negatively and a political struggle began between monks and lay priests. Aguinaldo and his men withdrew from town to town to the north, until they finally settled in Biak-na-Bato, in the town of San Miguel de Mayumo in Bulacan. It was there that they founded the so-called Republic of Biak-na-Bato, with a constitution designed by Isabelo Artacho and Felix Ferrer; It was based on the first Cuban constitution.  By broadly accepting laissez-faire doctrines in the second half of the eighteenth century, Spain relaxed its mercantilist policy. . . .