The Real Astillero de Bagatao or Royal Astillero of Bagatao played a very significant role in the development of international trade and commerce in the Philippines as a result of the Manila-Acapulco galleon trade. The astillero started its operation sometime in 1609- 1610. Workers were conscripted from Albay and Catanduanes and were described as workers with “unrivaled skills in shipbuilding”. The shipyard, in addition to galleons and warships, also built other smaller sea vessels which were being brought to Mexico and sold for huge profits. In 1619, a Spanish historian, De Pineda wrote “…in the province of Ybalon at Bagatao were built San Felipe and Santiago, eighty leagues from Manila. The galleon Buen Socorro was built in the 17th century and was described as “the best that was ever built thus far in these islands and its size, beauty, and swiftness were amazing” (Casimiro Diaz as quoted in Schurz, 1959).
Bagatao served as a “vital cog in the existence of the Spanish colony in Manila (Dery, 1991). Spanish galleons passed by the port of Bagatao for repairs, refurbishing and restocking supplies and as a refuge during storms.
Bagatao had abundant supply of the hardwood species called “parina” In addition to this, there were abundant narra, molave, yakal, guisok and lauaan needed for the construction of the various sea craft and vessels. It is also a strategic harbor, meeting the three major requisites for a shipyard: (1) a safe port, (2) an abundant supply of ship timber and (3) readily available native labor.