President McKinley's Schurmann Commission (1899) recognized the determination of the Filipino people to gain their independence and recommended the establishment of the institutions for a civilian domestic government as soon as practical.
Even though on March 16, 1900 the fighting in the War of Independence was still far from over, President McKinley appointed the Second Philippine Commission (Taft Commission) and gave it the legislative and executive authority to put in place the civilian government the Schurmann Commission had recommended.
In 499 statutes issued between September 1900 and August 1902, the Taft Commission swept away three centuries of Spanish governance and installed in its place the laws and institutions of a modern civil state. It established a code of law, a judicial system and elective municipal and provincial governments.
The Philippine Organic Act of 1902 extended the protections of the United States Bill of Rights to Filipinos and established a national bi-cameral legislature. The lower house was the popularly elected Philippine Assembly and the upper house was the Philippine Commission appointed directly by the President of the United States.
Following American practice, the Philippine Organic Act imposed the strict separation of church and state and eliminated the Roman Catholic Church as the official state religion. In 1904 the administration paid the Vatican US$7.2 million for most of the lands held by the religious orders. The lands were later sold back to Filipinos. Some tenants were able to buy their land but it was mainly the established estate owners who could afford to buy the former church lands.
The first elections to the Philippine Assembly were held in July 1907 and the first session opened on October 16, 1907. The Nacionalista Party of Manuel Quezon and Sergio Osmena won the election and continued to dominate Philippine electoral politics until World War II.
The political success of the Nacionalista Party was the skill of Quezon and Osmena in tying the traditional patron-client relations (utang na loob) to the new institutions of the modern civil state. It was also their worst mistake. The Nacionalista Party was a network of overlapping patron-client relations that were more concerned with particular local and personal interests and little inclined to address the larger national issues of social reform; land ownership, tenancy rights, population growth and the distribution of wealth. The Party built the power and influence of the old landed elite into the new institutions of democratic governance.
And what is the same thing stated differently, the new party politics excluded the non-elites from the rewards and benefits of representative institutions. The failure of democratic politics in the Philippines to represent its non-elites and mitigate their grievances has been the recurrent cause of violent discontent and the desperate resort to revolt and insurrection.
The Jones Act of 1916 carried forward the Philippine Organic Act of 1902. An elected Philippine Senate replaced the appointed Philippine Commission and the former Philippine Assembly was renamed the House of Representatives. As before, the Governor-General, responsible for the executive branch, was appointed by the United States President.
The Tydings-McDuffie Act of 1934 established the Commonwealth of the Philippines which at the end of a ten year transition period would become the fully independent Republic of the Philippines. A plebiscite on the constitution for the new Republic was approved in 1935 and the date for national independence was set for July 4, 1946.