The viceroy of Mexico advises the home government (February 8, 1587) to encourage the merchants who carry on the Philippine trade, especially by selling to them ships made in the royal shipyards.

Santiago de Vera, governor of the Philippines, writes to the king (June 26, 1587).  He entreats that more soldiers be sent, and that they be supplied with food and other necessaries; for, as those hitherto sent have received no food or pay, most of them have died from their privations, or from the unhealthful climate.  In view of the recent destruction of the city of Manila by fire, Vera has forbidden the people to build any more houses of wood, obliging them to use stone for that purpose.  Finding the city practically defenseless, Vera has begun to build near it a fort and other means of defense; and he asks for a small number of paid soldiers as a garrison for the city.  He has assessed on the encomenderos and other citizens and on the Indians the expenses of these works.  Another fort is needed at Cavite.  The king is asked to grant money and workmen for completing these fortifications.  Copper has been discovered in adjoining islands, also sulphur.  The trade with China is important and flourishing; and the products of that country are offered at Manila at very low prices.  The Chinese ask that the Spaniards will establish a trading-post in their country.  Friendly intercourse with Japan is commencing, and the Jesuit missionaries there are freely allowed to preach the Christian faith.  Vera has remitted the duties on goods brought to Manila from Japan and Macao.  A controversy has arisen between him and the bishop, the latter having ordered that the Chinese converts to the Christian faith should cut off their long hair, which causes many to avoid baptism:  the king is asked to settle this question.  Vera has sent to Macao for the recalcitrant Mexican officer who was mentioned in a previous document.  A Japanese prince, a Christian, offers to aid the Spanish with troops in any warlike enterprise that they wish to undertake.

A letter from the Audiencia to Felipe (June 25, 1588) reports the capture of the treasure-ship “Santa Ana” off the California coast, by the English adventurer Thomas Candish, which has caused much loss and hardship to the Spaniards in the Philippines.  Complaint is made of vexatious imposts levied on the Philippine trade by the viceroy of Mexico; the Audiencia ask that he be ordered to cease these measures, also that he shall not meddle with letters sent from Spain to the islands, or with the personal affairs of officials there.  The existence of the Philippine colony is endangered by the trade which is beginning between Mexico and China; and, having lost its best ships, colonists are no longer sent to augment its population.  Gratuities from the royal treasury have been bestowed upon the various religious communities.  The Audiencia commends the labors of the Jesuits, but advises that a college be not established for them, as they request, since “there are in all this country no students to attend their teachings.”  The hospitals should receive more aid from the crown.  The difficulties between the bishop and the Audiencia are explained; but they are now adjusted, and peace prevails.  It will be well to send many religious to the islands, provided they belong to the orders already there.