After returning to the islands, Aguinaldo wasted little time in setting up an independent government. On June 12, 1898, a declaration of independence, modeled on the American one, was proclaimed at his headquarters in Cavite. It was at this time that Apolinario Mabini, a lawyer and political thinker, came to prominence as Aguinaldo's principal adviser. Born into a poor indio family but educated at the University of Santo Tomás, he advocated "simultaneous external and internal revolution," a philosophy that unsettled the more conservative landowners and ilustrados who initially supported Aguinaldo. For Mabini, true independence for the Philippines would mean not simply liberation from Spain (or from any other colonial power) but also educating the people for self-government and abandoning the paternalistic, colonial mentality that the Spanish had cultivated over the centuries. Mabini's The True Decalogue, published in July 1898 in the form of ten commandments, used this medium, somewhat paradoxically, to promote critical thinking and a reform of customs and attitudes. His Constitutional Program for the Philippine Republic, published at the same time, elaborated his ideas on political institutions.

On September 15, 1898, a revolutionary congress was convened at Malolos, a market town located thirty-two kilometers north of Manila, for the purpose of drawing up a constitution for the new republic. A document was approved by the congress on November 29, 1898. Modeled on the constitutions of France, Belgium, and Latin American countries, it was promulgated at Malolos on January 21, 1899, and two days later Aguinaldo was inaugurated as president.

American observers traveling in Luzon commented that the areas controlled by the republic seemed peaceful and well governed. The Malolos congress had set up schools, a military academy, and the Literary University of the Philippines. Government finances were organized, and new currency was issued. The army and navy were established on a regular basis, having regional commands. The accomplishments of the Filipino government, however, counted for little in the eyes of the great powers as the transfer of the islands from Spanish to United States rule was arranged in the closing months of 1898.

In late September, treaty negotiations were initiated between Spanish and American representatives in Paris. The Treaty of Paris was signed on December 10, 1898. Among its conditions was the cession of the Philippines, Guam, and Puerto Rico to the United States (Cuba was granted its independence); in return, the United States would pay Spain the sum of US$20 million. The nature of this payment is rather difficult to define; it was paid neither to purchase Spanish territories nor as a war indemnity. In the words of historian Leon Wolff, "it was . . . a gift. Spain accepted it. Quite irrelevantly she handed us the Philippines. No question of honor or conquest was involved. The Filipino people had nothing to say about it, although their rebellion was thrown in (so to speak) free of charge."

The Treaty of Paris aroused anger among Filipinos. Reacting to the US$20 million sum paid to Spain, La Independencia (Independence), a newspaper published in Manila by a revolutionary, General Antonio Luna, stated that "people are not to be bought and sold like horses and houses. If the aim has been to abolish the traffic in Negroes because it meant the sale of persons, why is there still maintained the sale of countries with inhabitants?" Tension and ill feelings were growing between the American troops in Manila and the insurgents surrounding the capital. In addition to Manila, Iloilo, the main port on the island of Panay, also was a pressure point. The Revolutionary Government of the Visayas was proclaimed there on November 17, 1898, and an American force stood poised to capture the city. Upon the announcement of the treaty, the radicals, Mabini and Luna, prepared for war, and provisional articles were added to the constitution giving President Aguinaldo dictatorial powers in times of emergency. President William McKinley issued a proclamation on December 21, 1898, declaring United States policy to be one of "benevolent assimilation" in which "the mild sway of justice and right" would be substituted for "arbitrary rule." When this was published in the islands on January 4, 1899, references to "American sovereignty" having been prudently deleted, Aguinaldo issued his own proclamation that condemned "violent and aggressive seizure" by the United States and threatened war.

Data as of June 1991