regions nearest Manila must be conquered, for there
is rebellion now in the heart of Luzon. Encouragement is given to
extend conquests from the Liu Kiu Islands to Java, Borneo, and the
Moluccas. The expense is to be borne by the royal exchequer, so far
as shall be necessary, although the plan of rewarding the conquerors
from the conquered territory is to be followed. The Indians are to have
the right of paying their tributes in any goods at their own option,
to avoid extortion. The religious must not go to China or elsewhere,
but must do the work among the Indians for which they were sent to the
islands. The Chinese suffer oppression and extortion from the customs
officers; this must be corrected. Encomenderos and citizens are not
to leave the islands without permission, on pain of confiscation of
encomiendas. Trade between the islands and China is not to be given up,
in spite of objections made by the Portuguese. Effort shall be made to
teach the Castilian language to the Indians. The governor must maintain
cordial relations with the new Audiencia and with the ecclesiastics.

Luis Perez Dasmarinas prays the king (June 30, 1596) for permission
to lade a small vessel for Peru, that he may make enough to pay
off his debts. An answer is deferred until after the residencia
in his case and his father's be taken. Morga writes to Felipe II
(July 6, 1596) a general report. The country in general is at peace,
and fears from Japan have been removed by the calming influence
of the Franciscans there. Figueroa has been killed in Mindanao,
leaving an estate sufficient to carry on the expedition, and infant
heirs to his prospective rewards. The expedition to Camboja has
gone--the tone of Morga's report evidently disapproving this;
and an expedition to China has been forced to return. There has
been uneasiness as to the presence of so many Chinese, and many
have been sent out of the country. The lines of Manila have been
newly drawn, making it easier of defense. Financial affairs require
complete reform. The officials of the treasury are under suspension,
pending investigation; and the revenue has been wasted for needless
salaries and sinecures. The soldiery devote themselves to trade,
losing their military efficiency and interfering with the business
of the citizens. The city of Manila is well provided with funds,
and the fiscal arrangements are just. Internal affairs are in a bad
way, because of the facility and youth of Luis Perez