History of the Philippines (1521–1898) Castilla". Legazpi became the country's first governor-general. With time, Cebu's importance fell as power shifted north to Luzon. The archipelago was Spain's outpost in the orient and Manila became the capital of the entire Spanish East Indies. The colony was administered through the Viceroyalty of New Spain (now Mexico) until 1821 when Mexico achieved independence from Spain. After 1821, the colony was governed directly from Spain. During most of the colonial period, the Philippine economy depended on the Galleon Trade which was inaugurated in 1565 between Manila and Acapulco, Mexico. Trade between Spain and the Philippines was via the Pacific
Direct colonial rule Direct colonial rule Direct colonial rule is a form of colonialism that involves the establishment of a centralized foreign authority within a territory, which is run by colonial officials. According to Michael W. Doyle of Harvard University, in a system of direct rule, the native population is excluded from all but the lowest level of the colonial government. Ugandan academic Mahmood Mamdani classifies direct rule as centralized despotism: a system where natives were not considered citizens. The opposite of direct colonial rule is indirect rule, which integrates pre-established local elites and native institutions into the administration of the colonial government.