It hardly seems possible that for thousand of years the place where the town of Pagbilao now lies was unknown to other Filipinos. The people then in distant places went about their lives unaware of a great place which lay on the northern part of Tayabas Bay and on the north-eastern part of the Sierra Madre mountain range. The accidental discovery of the place was the result of the search for fortune, the trial of the braves and hardy pioneers who wanted to build new homes in the wilderness to be called their own. The place then was a thick jungle where all wild native animals roamed. Travel in those days was so hard and dangerous that most natives were content to stay at home. But there were some who wanted to explore and learn more about the neighboring regions.

In the early part of the seventeenth century, a couple by the name of Pablo and Rita made a long journey across the wilderness bringing with them a handfull of rice seedlings and some other useful provisions. Fortune seemed to be with them, they reach the place, the present site of the poblacion of Pagbilao. After a brief stay and learning that the place was a very promising region in future, they fetched their married children from their place of origin and live together asking the place their permanent settlement. Few years later the aboriginal inhabitants began to increase in number added however, by tribes from other distant places.

In the year 1765, a prominent man of the place in the name of Don Luis Felipe ruled the tiny poblacion, his advices were considered by the inhabitants as laws. The people then live in peace and no sign of disorder existed. They lived in huts furnished with neccessary provisions. Native products such as bamboo beds (papag) and winnowind baskets (bilao) were common in the place as their major products. Tagalog was the dialect they used.

One bright day in the early part of 1765, while the natives were busy on their usual trade of business making papag and bilao, a group of Spanish missionaries, mostly catholic priests, arrived in the village. It was a traditional belief of the natives that more often, by bad means rather than good ones, the foreigners maltreated the natives and fearing that it may happen, the natives tried to elude the strangers. Realizing that the natives were in panic and afraid, the Spaniards made an excellent idea by raising their right hands wide open symbolizing that they came to make friends with the Filipinos. The natives then became calm and settled in their places in friendly manner. The missionaries tried to talk with the Filipinos using their own language but were not understood. One of the missionaries however, asked a friendly question, incidentally pointing to a bamboo bed. "What is the name of this village?" Assuming that the question was what is the name of the object he was pointing at, one of the villagers quickly replied "PAPAG" and immediately the missionary noted the word papag in his record. Soon another missionary in the group asked another question with the same manner pointing to a winnow-wind basket. What place is this? "BILAO" readily answered one of the natives and the word biiao was also noted on the record. After so many exchanges of strange languages between the natives and the strangers, no proper understanding resulted. Thence the Spaniards proceeded their course westward discussing as to what name they should call the place. The question was resolved however, by calling the place a name derived from the words spoken by the natives and referring to their records, the phrase Papag-Bilao was soon realized. Thinking that the word was too long to pronounce and to shorten the name, they precisely ommited the first two letters from the word papag. P and A - producing therefore, the word Pag. With the combination of the words PAG and BILAO, the word PAGBILAO, finally originated and since then, the place was called PAGBILAO.

In the year 1767 the Philippines was already ruled by the Spanish government and it was their primary mission to Introduce Christianity in the island. The group missionaries who discovered the village of Pagbilao returned to the place and sought the assistance of Don Luis Felipe to spread the Roman Christian catholic doctrine in the community. From that time on, Don Luis got acquainted with the Spanish government officials and religious authorities and took active participation on whatever mission his services was required. Among the objectives of Don Luis Felipe was to have Pagbilao its own well-established government. His sacrifices and heroic deeds was acknowledged by an order from authorities of Spain creating the village of Pagbilao as "Pueblo de Pagbilao" appointing Don Luis Felipe as the first Kapitan of Pueblo de Pagbilao.