From Basques in the Philippines, by Marciano R. de Borja (U. Nevada Press, 2012), pp. 109-111:
On March 31, 1937, Franco launched the military offensive against Bizkaia. The air force—whose core group was composed of German and Italian pilots—pounded the cities of Eibar, Durango, Gernika, Zornotza, Mungia, and Bilbao, causing hundreds of deaths. As depicted in the famous painting of Pablo Picasso, Gernika was razed. In fact, the town had no military installations and was not sheltering combatants. It became a prime target because it was the place where the fueros of the Basques were traditionally renewed by the Spanish monarchs. It was therefore a symbol of Basque autonomy. The destruction of Gernika was meant to crush the Basque spirit of resistance. The Basque residents in the Philippines were divided. Those from Bizkaia and Gipuzkoa loathed Franco, while those from Navarre backed him. In fact, Navarre was the first province in Spain to throw its support to Franco and supplied troops to the nationalist cause. One of Franco’s able military commanders, General Emilio Mola, was Navarrese.
When the Spanish civil war broke out in 1936, Basque exiles like Saturnina de Uriarte and Estanislao Garovilla settled in Cebu and established the most important fish-canning factory in the country, the Cebu Fishing Corporation. Uriarte was previously a partner in Garovilla Hermanos y Compañia, a canning factory in Bermeo (Bizkaia). Basque philanthropists such as Marino de Gamboa and Manuel María de Ynchausti, and companies, like Aldecoa-Erquiaga and Company, extended assistance to Basque refugees.
Although the Basques in the Philippines were concerned about the Spanish civil war, they were more preoccupied with the imminent war in the Pacific. Japan had invaded China in 1939 [sic!; actually many times in many places, but full-scale warfare commenced in 1937—J.], and its relations with the United States had become antagonistic and bellicose. The Philippine Commonwealth government under President Manuel L. Quezon hired General Douglas MacArthur, the newly retired chairman of the Joint Chiefs of Staff of the U.S. Army, as field marshal to prepare the Philippine defense in the event of war.
On December 8, 1941, Pearl Harbor was attacked and destroyed by the Japanese Imperial Navy. Days after, Manila was declared an open city to spare it from destruction. The American air force bases in Clark (Pampanga) and Iba (Zambales) in central Luzon were destroyed. The Japanese forces entered Manila on January 2, 1942, without a fight. The combined American and Filipino forces defended Bataan in a last-ditch effort to halt the Japanese advances. On April 9, Bataan fell, and Japan became the new colonial master of the Philippines. But the resistance movement continued.
During the war, Spaniards, including the Basques, were viewed with suspicion and hostility by many Filipinos. Some Spaniards collaborated outright with the Japanese and openly rejoiced over the initial defeat of the Americans, believing naively that the Japanese would return the Philippines to Spain. All the castilas (Spaniards), therefore, became the target of resentment and were vilified as the “Fifth Column,” a derogatory term meaning opportunists, potential traitors, and outright collaborationists. In fact, assets of Basque families and companies, such as Aboitiz, Ayala, Elizalde, were frozen by the Philippine Commonwealth government, although they supported the American military. For instance, the vessels of La Naviera, a shipping firm partly owned by the Aboitiz and Company, were put at the disposition of the American forces. Aboitiz and Company was singled out because it had had a Japanese director on its board and exported large quantities of copra to Japan in the 1930s, obviously used to fuel Japan’s war machine.
The hatred against the Spaniards was further exacerbated by the fact that General Francisco Franco, the caudillo (supreme ruler) of Spain, sent a congratulatory message to the Japanese command immediately after the fall of Corregidor and Bataan. Spain was one of the eleven nations aligned with the Axis powers that recognized the puppet government established by the Japanese military forces in the Philippines.
Most Basques were fiercely opposed to the Japanese occupation. Many Basque families, like the Elizaldes, the Luzurriagas, and the Legarretas, contributed indirectly and directly to the Philippine guerrilla movement. Others, like the Uriartes, the Bilbaos, and the Elordis, joined the resistance movement in Negros and the Visayas region.