Philip V of Spain - Later Reign

Later Reign

Philip helped his Bourbon relatives to make territorial gains in the War of the Polish Succession and the War of the Austrian Succession by reconquering Naples and Sicily from Austria and Oran from the Ottomans. Finally, at the end of his reign Spanish forces also successfully defended their American territories from a large British invasion during the War of Jenkins' Ear.

During Philip's reign, Spain began to recover from the stagnation it had suffered during the twilight of the Spanish Habsburg dynasty. Although the population of Spain grew, the financial and taxation systems were archaic and the treasury ran deficits. The king employed thousands of highly paid retainers at his palaces—not to rule the country but to look after the royal family. The army and bureaucracy went months without pay and only the shipments of silver from the New World kept the system going. Spain suspended payments on its debt in 1739—effectively declaring bankruptcy.