Monte de Piedad

José S. Arcilla, S.J.

Posted on May 20, 2013

THE MONTE de Piedad (pawn shop) began in medieval Italy to counter the prevailing usurious loans that choked the poor. In 1834, a similar institution began in Jerez de la Frontera (Spain).

In 1851, a royal decree created the Banco Español Filipino in Manila, and at the same time a Monte de Piedad. Initially tax free, it soon imposed a 2% rate interest to maintain its operations. It demanded no guarantees for its loans, except the goods the borrowers deposited there.

The Crown decreed not much later that the Monte de Piedad should not be under the colonial treasury, but under the Govenor-General’s office -- with the unexpected result: nothing was done for the next 20 years.

In 1877, Gov. Domingo Moriones took possession of his office. A veteran of the chronic Carlist Wars that practically ruined Spain, he quickly realized the urgent need to modernize the Philippines. He immediately settled the interminable Muslim conflict, and signed the peace pact with the Sultan of Sulu, who accepted vassalage under the Crown, besides receiving ₱2,400, while the principal datus ₱600.

In 1879, Moriones inaugurated the inter-island mail service between Luzon and Mindanao, exempting from tribute the crew of the mail boats and land mail carriers. The next year, 1880, he sought funds from the Confraternity of Mercy and other obras pias to subsidize the Monte de Piedad in Manila.

At first, the Monte de Piedad was housed in a rented office at the Colegio (now University) of Santa Isabel. Donations, including ₱50 from the governor’s monthly salary, helped pay for the use of the first office. No one, of course, was satisfied with the temporary arrangement, and everyone hoped for its own permanent building. They agreed to build one near the present Santa Cruz bridge in Manila, facing Goiti and Escolta Streets.

They laid down the corner stone on July 24, 1887, and hired the architect Juan Hervas, who volunteered to draw up for free the plans for a permanent edifice. But he died before finishing his plan. Archbishop Pedro Payo of Manila also died within a short time. His successor, Archbishop Bernardino Nozaleda, withdrew ₱8,000 deposited in the Banco Español Filipino, to build the warship "Filipino," which was never used, and transferred the money to the Monte de Piedad.

Providentially, neither the Philippine revolution in1896-1897 nor the Fili-American conflict in 1899-1903 destroyed the savings bank. Today the Monte de Piedad continues to provide financial help to the needy.