The Spanish word "sello" means "stamp".    This word was almost always  included in the  label of   the stamp which was printed on the stamped paper   (papel  sellado) which was first issued for the Philippines on January  1,   1640,  and continued  to be issued every two years  thereafter until  the end of   the Spanish regime  In 1898,  the stamped paper which bore  these SELLO stamps was  for almost two  hundred years subsequent   to January 1,   1640,   the only form of stamped paper  issued for use in the Philippines.     It came to be used,  not only for judicial  actuations and documents of public record,  but also for many commercial  documents   such as insurance policies,   stock certificates,  customs  documents, and the books in which  the accounts and other records of merchants sad associations of persons were recorded.   The size and form of  the  stamped paper provided by the Government proved  to be inconvenient  for  some of these commercial documents.  With the   idea of   avoiding   this inconvenience,   the Royal  Decree of  May  16,   1886,   provided:
Article 1: for the issue of adhesive SELLO stamps which might be used instead of stamped paper  for   "insurance policies,  certificates of stock in banking and other companies, and similar documents;

Article 4: that corporation or private persons might have SELLO stamps printed directly upon their own stationery by  sending  such   stationery  to  the   National  Stamp Factory in Spain and  paying   in advance   the  cost of  printing.

In accordance with  this  decree a series of   imperforate adhesive SELLO stamps appeared on January  1,   1888,    These  stamps  were  labeled as valid  for  the   biennial  period of  1888 -89,  and were of   the  same denominations,  colors and design as the  stamps  printed upon the  stamped paper  issued  for  the  same biennial  period.

The provisions of   the Royal  Decree of May  16,  1886,   relating to the  use of  these adhesive SELLO stamps were   the  following:

Article 1: The stamped  paper and loose  (adhesive)  stamps  to be used in  the Philippine  Islands  for   the  term of  two years from July 1,   1886 will  be of   the classes  and values as  follows:

Sello 1 20.00 Pesos
Sello 2 15.00
Sello 3 10.00
Sello 4 5.00
Sello 5 3.00
Sello 6 2.00
Sello 7 1.00
Sello 8 0.50
Sello 9 0.40
Sello 10 0.25
Sello 11 0.10
Sello 12 Official 0.05

There will also be printed loose (adhesive)  stamps for the first eight classes and the   tenth class designated for stamped paper, such  loose stamps  to  be used for  insurance policies, certificates of stock in banking and other companies, and similar documents on  which their use is required by the  government”.  (Article  1 continues with a complete list of  the other  stamps and  stamped paper whose issue and use for  the   biennial  period beginning on July 1,   1886, 
was authorized).

Article 45: Customs House clearances will be issued   loose stamps authorized by Article  1  the following manners: On each inward or outward foreign manifest,  a  50-centimos stamp;     25-Centimos exportation invoice,  declaration of consumption, deposit or transit,  license for departure of vessels, note or manifest of transfer of goods,  and on  those (documents) presented for the exportation of goods from the mercantile deposits or warehouse.

Article 55:  Clearing House Certificates (Polizas de Bolsa) will bear a loose stamp of  the value of one peso when the extant of the operation doss not exceed a nominal sum of P25,000;   in excess of this sum but not amounting to P50,000, a two-pesos  stamp; and a three-pesos stamp from P50,000 upward.” 

Although  the Royal  Decree of  May  16, 1886,   states  that it   is to become effective  on July 1, 1886, the adhesive  SELLO stamps  authorized by Article 1,  above quoted,  did not appear  until January 1,   1888.     And when they did appear,   the denominations from one peso upward found very little use.    The  higher  denominations  were intended  to be use in payment of   the stamp tax on insurance policies, stock certificates, and similar documents,   which had formerly been executed upon stamped paper  and could still be executed upon stamped paper.    The provision of Article 4 of  the Royal   Decree of May  16,   1886,  which gave business firms   the  privilege of  having  SELLO stamps  printed directly upon their own  stationery, no doubt  decreased the demand for adhesive SELLO stamps.