When trade between Manila and Acapulco was established in 1565 with the successful journey of a ship sent by Legazpi from Manila, the Spanish military sought for places that would serve as shipyards. In the Spanish navy looked for possible sites to build the galleons. These sites were characterized by safe harbors, a supply of hardwood and easy access for laborers. Until the consolidation of shipbuilding activity in Cavite, various sites were used as shipyards or as repair and rest stations namely, Cebu, Iloilo, Palapag in Samar and Bagatao an island off the coast of Sorsogon. The astillero de Bagatao was established in a place now called San Miguel. The shipyard functioned for about seven decades but by the mid-17th century it had been abandoned. Its exposure to seaborne raiders rendered the site vulnerable. A watchtower was built before 1616.
Today nothing is left of the shipyard. Its present site is under the Philippine Navy and has a lighthouse.
José lists a baluarte built at Bagatao Island, the site of a royal shipyard. Bagatao is at the mouth of Sorsogon Bay and faces Ticao Island. Insufficient data regarding the fortification of Bagatao.