The royal estate has advanced, and is now progressing by the means
which I have provided for its increase. Although the rents and profits
have been doubled since I came, their sum is but little, and does not
amount to thirty thousand pesos annually. This is not sufficient for
the salaries and expenses of the fleets and artillery, and therefore
the treasury remains in debt, although not to such an extent as
formerly. Everything possible is done to cut down expenses for your
Majesty, and thus a great reduction has been made therein. This has
been done with many supplies which are usually provided from Nueva
España, since I am informed that many articles which are brought
thence at great cost can be supplied here. It is a mistake for your
Majesty to think that these islands can serve the royal estate with
a considerable sum of money, for I can say that that will not be
for many years yet. But it is right that your Majesty should value
this land highly, on account of its proximity to China. Without doubt
that is the finest country in the world, since it has so many people
and so great wealth. This island of Luçon is not a hundred leagues
distant from China, and ought to profit much from the endeavors made
there by the vassals of your Majesty. It is considered just that war
should be made against them; and this and their conquest depends only
on the way in which God inclines the heart of your Majesty.

Until his divine Majesty is pleased to appoint that time, it would
be a serious error to undertake a war with the people who could be
sent from here. I have determined to occupy them in finishing the
settlement of these islands. Accordingly, the village of Arevalo--on
the island of Panay, fifty leagues from this district--has just been
settled. The land is very fertile and the inhabitants are rich. They
are almost all at peace, and the town is increasing in population