The Philippine culture of corruption had its roots in the Spanish colonial times. For almost 400 years, Spain's strategies towards the pacification of the natives had brought up so much corruption that led to the miseries of the Filipino people. The encomienda system, tribute, polo, bandala, and Spains economic policies were among those which depicted the development of the culture of corruption in the Philippines.

The encomienda system was originally a feudal grant introduced by the Spanish Crown for the combined purposes of rewarding deserving generals and conquerors during the Spanish wars of recovery of territory from the Moors and attracting others to settle in the colonies. But in the Philippines, it was not a land grant because it was more of an administrative unit for the purpose of exacting tribute from the natives. The unlawful exaction of numerous services coupled with greed and cruelty made the lives of the natives miserable. Some of the punishment for not paying the required tribute were torture or imprisonment and burning of houses. Those who collects the tribute were the cabeza de Barangay who were the former datu or chieftains.

The polo or forced labor required male Filipinos between 16 to 60 years of age to render manual service for the country for the purpose of building ships, churches, roads and other infrastructures. To be excluded from Polo, one has to pay an exemption fee which only a few Filipinos could actually pay. Those who are exempted also were the landed aristocracy (principalia), the teachers, government officials and persons of wealth.

The bandala refers to the assignment of annual quotas to each province for the compulsory sale of products to the government. But due to lack of funds, the government issued promissory notes in exchange for the goods. Nonpayment on the part of the government meant seizure of products. Because the quota was strictly implemented, farmers were forced to buy from other towns in times of calamity or poor harvest just to meet the requirement. Unfortunately, the colonial government was not even able to pay most of these farmers. The bandala system made the corrupt Spaniards a hundred times richer, and the Filipinos, a hundred times poorer.

For many, many years, Spain utilized the Philippines' natural and human resources for its own benefit and not for the betterment of Filipino lives. When the Spaniards came to the Philippines, the Filipino ancestors were already trading with China, Japan, Siam, India, Cambodia, Borneo and the Moluccas. The Spanish government continued trade relations with these countries, and Manila became the center of commerce in the east. However, the merchants of Cadiz and Seville in Spain soon felt threatened because Manila had become a major competitor. They feared the Chinese goods coming from Manila might flood the foreign markets and drown out Spanish goods due to their lower prices. The Spaniards closed the ports of Manila to all countries, except Mexico. Thus, the Manila-Acapulco Trade, better known as the Galleon Trade was born. Later, it became a source of graft and corruption and only a few influential people profited from the Galleon trade at the expense of the colony's economic development.