The pre-1935 U.S. territorial administration, or Insular Government, was headed by a governor general who was appointed by the president of the U.S. In December 1932, the U.S. Congress passed the Hare-Hawes-Cutting Act (First Philippine Independence Act) with the premise of granting Filipinos independence. Provisions of the bill included reserving several military and naval bases for the United States, as well as imposing tariffs and quotas on Philippine exports. It was vetoed by President Herbert Hoover but the American Congress overrode his veto in 1933 and passed the bill. The bill, however, was opposed by the then Philippine Senate President Manuel L. Quezon and was also rejected by the Philippine Senate.
This led to the creation and passing of a new bill known as Tydings-McDuffie Act, or Philippine Independence Act, which allowed the establishment of the Commonwealth of the Philippines with a 10-year period of peaceful transition to full independence. The Commonwealth was officially inaugurated on November 15, 1935.
A Constitutional Convention was convened in Manila on July 30, 1934. On February 8, 1935, the 1935 Constitution of the Republic of the Philippines was approved by the convention by a vote of 177 to 1. The constitution was approved by President Franklin D. Roosevelt on March 23, 1935 and ratified by popular vote on May 14, 1935.
In October 1935, Philippine presidential elections were held. Candidates included former president Emilio Aguinaldo, the "Philippine Independent Church" leader Gregorio Aglipay, and others. Manuel L. Quezon and Sergio Osmeña of the Nacionalista Party were proclaimed the winners, winning the seats of president and vice-president, respectively.
The Commonwealth Government was inaugurated on the morning of November 15, 1935, in ceremonies held on the steps of the Old Congress Building in Manila. The event was attended by a crowd of around 300,000 people.
The new government embarked on ambitious nation-building policies in preparation for economic and political independence. These included national defense (such as the National Defense Act of 1935, which organized a conscription for service in the country), greater control over the economy, the perfection of democratic institutions, reforms in education, improvement of transport, the promotion of local capital, industrialization, and the colonization of Mindanao.
However, uncertainties, especially in the diplomatic and military situation in Southeast Asia, in the level of U.S. commitment to the future Republic of the Philippines, and in the economy due to the Great Depression, proved to be major problems. The situation was further complicated by the presence of agrarian unrest, and of power struggles between Osmeña and Quezon, especially after Quezon was permitted to be re-elected after one six-year term.
A proper evaluation of the policies' effectiveness or failure is difficult due to Japanese invasion and occupation during World War II.
Japan launched a surprise attack on the Philippines on December 8, 1941. The Philippine Commonwealth government drafted the Philippine Army into the U.S. Army Forces Far East, which would resist Japanese occupation. Manila was declared an open city to prevent its destruction, and it was occupied by the Japanese on January 2, 1942. Meanwhile, battles against the Japanese continued on the Bataan Peninsula, Corregidor, and Leyte, until the final surrender of United States-Philippine forces on May 1942.
Quezon and Osmeña were escorted by troops from Manila to Corregidor, and later they left for Australia and then the U.S. There they set up a government in exile, which participated in the Pacific War Council as well as the Declaration by United Nations. During this exile, Quezon became ill with tuberculosis, and later he died of it. Osmeña replaced him as the president.
Meanwhile, the Japanese military organized a new government in the Philippines known as the Second Philippine Republic, which was headed by president José P. Laurel. This government ended up being very unpopular.
The resistance to the Japanese occupation continued in the Philippines. This included the "Hukbalahap" ("People's Army Against the Japanese"), which consisted of 30,000 armed people and controlled much of Central Luzon. Remnants of the Philippine Army also fought the Japanese through guerrilla warfare, and it was successful, since all but 12 of the 48 provinces were liberated.
The American General Douglas MacArthur's army landed on Leyte on 20 October 1944, and they were all welcomed as liberators, along with Philippine Commonwealth troops when other amphibious landings soon followed. Fighting continued in remote corners of the Philippines, until Japan's surrender in August 1945, which was signed on 2 September in Tokyo Bay. Estimates for Filipino casualties reached one million, and Manila was extensively damaged when certain Japanese forces refused to vacate the city (against their orders from the Japanese High Command).
After the War in the Philippines, the Philippine Commonwealth was restored, and a one-year transitional period in preparation for independence began. Elections followed in April 1946 with Manuel Roxas winning as the first president of the independent Republic of the Philippines and Elpidio Quirino winning as vice-president. In spite of the years of Japanese occupation, the Philippines became independent exactly as scheduled a decade before, on July 4, 1946.
The Commonwealth ended when the U.S. recognized Philippine independence on July 4, 1946, as scheduled. However, the economy remained dependent to the U.S. This was due to the Bell Trade Act, otherwise known as the Philippine Trade Act, which was a precondition for receiving war rehabilitation grants from the United States.
At the time, tenant farmers held grievances often rooted to debt caused by the sharecropping system, as well as by the dramatic increase in population, which added economic pressure to the tenant farmers' families. As a result, an agrarian reform program was initiated by the Commonwealth. However, success of the program was hampered by ongoing clashes between tenants and landowners.
An example of these clashes includes one initiated by Benigno Ramos through his "Sakdalista" movement, which advocated tax reductions, land reforms, the breakup of the large estates or "haciendas", and the severing of American ties. The uprising, which occurred in Central Luzon in May 1935, claimed about a hundred lives.
Due to the diverse number of Philippine languages, a program for the "development and adoption of a common national language based on the existing native dialects" was drafted in the 1935 Philippine constitution. The Commonwealth created a "Surian ng Wikang Pambansa" (National Language Institute), which was composed of Quezon and six other members from various ethnic groups. A deliberation was held, and the Tagalog (due to its extensive literary tradition) was selected as the basis for the "national language" to be called "Philipino".
In 1940, the Commonwealth authorized the creation of a dictionary and grammar book for the language. On the same year, Commonwealth Act 570 was passed, allowing Pilipino to become an official language upon independence.
The economy of the Commonwealth was mostly based on farming, as agriculture-based. Farmers grew abaca, coconuts and coconut oil, sugar, and timber trees. Other foreign income came from money spent at the American army, navy, and air bases in the Philippines, such as the naval base at Subic Bay and Clark Air Base. The economy was good until World War II stopped growth.
In 1941, the estimated population of the Philippines reached 17,000,000 while Manila's population was 684,000. The number of Chinese people rose to 117,000. There were also 30,000 Japanese people, with 20,000 living in Davao, and 9,000 U.S.-Mexicans. English was spoken by 27% of the population. Spanish was spoken by only 3%.