By about A.D. 1000 complex societies would already have evolved in the Philippine archipelago so that continuing and established trade through long distances over water became possible. In specific key areas, there were large concentrations of populations although still based on domestic economy, on the other hand, were also engaged in marketing activities that included different networks both local and overseas. The communities that built up along estuaries, floodplains, lakeshores, coasts and other similar areas would have grown in size. There would be a wider dispersal of inland communities; which in turn would affect the environment. More and areas would have been brought under cultivation, and a recession of the forest line would result from this. In well protected bays, coves, estuarines where ships could lie in safely, ports developed where the nuclei of foreign trade are located and radiated. Among such township thus far located by archeological works are the estuarine and coastal areas of Northern Luzon about Aparri and Ballesteros.

      The tip of Pangasinan about the area of Bolinao and up along the Balingasay river were centers of population. In the Manila area, to a large extent the land was low and swampy and the well populated area was along the river in the old Lamayan area presently known as Sta. Ana. Lamayan served as entrepot to the large numbers of communities along the Laguna de Bay fringes like Tanay, Pila, Bay and many others. There were many places in Batangas, specially in the Calatagan Peninsula and across the Verde Island Passage to Mindoro about Puerto Galera. In the extreme southern Luzon in the Bicol regions there appeared to be large population centers in many of the estuarine areas and markedly so in Sorsogon. Across the San Bernardino Straits, northern Samar appeared to have large concentrations of people to attract foreign trade goods in large quantities.

      The city of Cebu itself was a major port with probably among the densest populated areas. The area about the coast of Iloilo and the City itself appeared to have been well peopled by this time as the area about the coast of Panay. Southeastern Negros as well as the south and eastern coast of Bohol showed evidences of foreign trade indicating nucleation of communities. Across the Bohol sea, in northeastern Mindanao, the areas about Butuan and up the Agusan river appeared to have well established population centers that were quite widespread considering the distribution of ceramics materials of very high quality and early age.

      To a large extent, in fact, where the present metropolitan areas arenow located, these likewise were the places of population nucleation during the end of the Metal Age and the succeeding periods. The presence of quite a few evidences of gold processing and jewelry-making in the general area, and up the Agusan river would make this area a distinct market place with patrons from overseas apart from the local ones. All along the coast of Mindanao to the tip of Zamboanga would be settlement areas that served the continuous movements of people specially about A.D. 1100 that saw populations move from northeastern to southwestern Mindanao and sustained by an intense trade with Asian ceramics as a major commodity, and indicated by the presence of these artifacts, and the close similarity between the Butuanon language with that of the Tausug.

      The pattern all over the islands was the same with respect to the orientation of the settlements along waterways. The major centers remained near the coast, serving as entrepots for the populations in the interiors, using the mountain drainage systems as the lines of contact with the interior groups. The different groups along a single waterway network composed one market network. At times along the fringes of this single network there were overlaps with other networks of trade as when anindividual would have trading partners in at least two networks.

      The overseas trade took advantage of the existence of these local trade networks and made use of these systems in order to distribute their own goods specially into the interior, and where there were no good port facilities where their ships could berth while conducting their business. Thus, systems of wholesale were adapted where the Chinese merchants for instance would wait a number of months for their clients to dispose in retail the bulk of items they have received.

      The quantity of Asian trade materials appeared to be more in the southern parts of the country, specially about the coasts of the central Philippines and southern Luzon. Present marine archeological evidence indicated the existence of trade routes that ran parallel to the archipelago on the western side, with incursions into the central Philippine areas. It would seem that the existence of open-water type large Southeast Asian boats as those found in the Butuan area inhibited the intrusion of foreign trade into the local networks unless the local systems were used, thus developing only specific ports of call by Asian vessels. The existence, too, of the more concentrated markets in the land areas south of the Philippines – Indonesia, the Malaysian Peninsula and further west into Thailand, worked toward the movement of Chinese trade more into these areas so that a great deal more of trade activities went on at the southern end of the Philippine archipelago.

      An indication of this situation was shown by the number of Thai ceramics found in this country. Archeological evidences showed that there were more Thai high-fired wares found in the southern Philippines. The number progressively became less as one goes north, and in fact, these became extremely rare as one goes through northern Luzon. In Indonesia this type of ceramics were quite common in Sulawesi. In northern Luzon, less Asian ceramics were found than in the southern islands even in terms of Chinese tradeware.

      During this period, all indications pointed to only two areas in the country where Asian trade appeared to have taken place earlier than other places. These two places were the western coast of the province of Batangas and the northeastern coast of Mindanao. Both these places have yielded high-fired ceramics that could be dated between A.D. 1000 to 1100 or earlier. Included in these materials were ceramics that could be ascribed to the Arab world, including some vessels of glass. Very interesting to note, however, was the wide disparity between the kinds of local pottery found in these two sites. In the Batangas sites the local earthenware were at the classic terminal.

      Metal Age types which included the sophisticated presentation dishes with ornate cut-out stands, goblets, jars that were incised, impressed and appliqued with wide ranges of designs and motifs. The surfaces were red-slipped and highly polished. Those found in the northeastern Mindanao, however, were of a quality showing a limited range in form and decoration. It appeared that the two areas belonged to different local trade networks, but were linked to similar or the same Asian trade sources.

      By this time the intensive wet-rice agriculture was well established in the lowlands and floodplains as the economic base of the larger population centers. With the increasing contacts with China and its metal industry the impetus for the development of the intensive agricultural complexes was likewise enhanced. The shift to the use of draft animals and the plow complex made the system more efficient leading to optimal production of rice which would have already gained a prestige position as staple. Different strains of rice, too, would have begun to be adopted to dry regimes and introduced in swiddens in the highlands, where this was intercropped with other cultigens. Unlike communities in the interior uplands, food gathering would have become minimal as supplementary food source.

      Animal husbandry, on the other hand, would have become important and growing in scale, and in fact would have been considered an index for economic wealth and status among the the different societies. Raising of animals, specially of water buffaloes, would have been an adjunct of the growth of wet-rice agriculture. These animals became items of wealth important not only for farming purposes but for trade, prestige, and probably more sociologically significant, the role these animals occupy in rituals conducted by the different societies. In many of the archaeological sites that date to this period, the remains of water buffaloes were very much in evidence.

      Quite distinctive, too, of this period is the growth of metalcraft. Among the tremendous amount of high -fired ceramics found in archeological sites were also some numbers of iron slags. These are shallow semi-hemispherical residues in the making of iron that remained in the bottom of crucibles. These slags would suggest a specialization by a segment of the communities then in the production of metal tools, and the implication that some of the need for metal implements were by then being supplied by local manufacturers, aside from merely reworking ingots brought in through marine trade. The production also implied larger-sized permanent communities considering the demands for metal items that necessitated the organization of production lines. This also meant larger capital investments into endeavors other than agriculture.

      The economy is basically domestic in nature, still. Each household would be providing for individual needs as a whole. There would be a great deal of barter between social units with regards to goods they do not themselves produce, e.g. marine against forest products. It is not very clear whether there existed a market based on the use of money as medium of exchange. To be sure coins of Chinese origin have been found in archeological sites, but whether or not these have been used in terms of purchasing goods was not quite clear. Later Spanish records still documented barter as the usual method of exchange between the Chinese and local traders. Ethnographic data still showed this method being used. It was highly probable that market places existed where transactions are carried out at specified times and frequency adapted to the needs of the various communities. These markets rotated through different known places and followed definite schedules. The events then became highly socialized occasions where people congregate. These markets then provided the intermesh between the domestic economy and the exchange systems external to this.

      The overlapping networks of interchanges between different communities on the coastal and estuarine areas and through to the inland communities could be seen from the range in quatity, kind and in time of the trade ceramics. It was very common to see Ming dynasty ceramics, for instance, as heirloom pieces or used domestically by households of ethnic groups in area in the mountains that were difficult of access, and interred with their dead in traditional burial grounds. During this protohistoric period contacts were maintained principally through the medium of the forms of markets that prevailed interconnecting different adjacent communities.

      It is probable from the postulated levels of social and economic integration of the various populations, that while the societies were basically egalitarian in character, there would have been growth in the political aspect due to the larger community sizes and the fact that the growing market systems would have brought the different communities into direct contact with one another. There were analogous ethnographic examples even during the present times where societal groups in the level of swiddening integration have developed group dynamics where related households were grouped for concerted action even for internal needs through the intervention of an assertive individual often defined by age, sagacity, economic wealth, and so on, and supported by sanctions imposed by the community. Positions like these would have polarized further making the leadership role more defined, backed by kin members who were further reinforced by the kindred and the ramifications through their own kindred and affines. The maintenance of ethnic boundaries, too, contributed to these social polarizations about an accepted spokesman or occasional leader.

      Further in the development are the alliances forged between different groups for larger arenas of action, as when two smaller communities would agree to an occasional understanding to unite before a confrontation with a larger group. Usually alliances of this sort take place between kin groups or at least between the same ethnic aggrupation against another ethnic group. An example of this was when the peoples of the Zambales area allied with the peoples of Pangasinan against the Ilocano populations to the north of what is now the province of La Union. Situations similar to this call for the exercise of politics in a level very different from those that existed before would have existed in highly populate regions, and all these went beyond the principles of kinship as the principle for organization of the members. Expediency, leadership and the intimacy of intergroup interactions, transactions and territorial affinities could have dictated the parameters of the alliances.

      Certainly, the communities specially about the coastal areas with larger carrying capacities in some areas of the islands would have developed settlements characterized by populations large enough to necessitate political integrations of this level. Witness the situation between Cebu and Mactan during the arrival of the first Spaniards in 1521, when there was a stand-off in leadership between heads of the communities in Cebu and the island of Mactan.

      This politicalization of certain segments of the Philippine societies achieved a more complex degree in the southern part of the archipelago with the introduction of Islam together with the adjunct sociological and political structures that go with this; and superimposed on earlier Indian influence with the ramifications of status positions and roles reinforced by Hindu-Buddhistic beliefs that filtered in. The assimilation of the structures may not have been exactly as introduced but most of these would have been modified. Even in oral literature among the extant ethnic groups, reference have been made to status positions which are more nominal in character than what existed in reality. Much have been made in referring to prestige positions that may not have any legitimization in fact, e.g. the rajas, sultans and datus positions that had no supporting structures, as those that have been found among the peoples of Palawan. Nevertheless, the social and political structures among the peoples of the Philippines influenced by Islam were the most developed in terms of organization.

      Elsewhere in the islands much of the population centers were political enclaves operating in particular catchment areas. These groupings are interdigitated with other regions through the medium of economic interactions. The larger communities through the sheer size of the market potentials would attract larger volumes of trade, and would also thus become political centers where probably ward systems would operate where lesser leaders are loosely structured into supportive groups under the leadership of a more powerful individual.

      In this state the islands of the Philippines were to be come upon by the first explorers from the west; and the written history of the Philippines by the Spanish chroniclers was to begin.