Cabesang Tales’s daughter and Basilio’s girlfriend Julí wakes up, hoping a miracle has happened, but the day is the same as always. She tries to be upbeat, but her grandfather, Tandang Selo, is sad. She leaves for her mistress Sister Penchang’s house. Christmas is a difficult time. When relatives come by to greet Tandang Selo, he discovers his voice is gone.

No one is truly concerned with Cabesang Tales, his family, and their plight. Sister Penchang, the woman who hired Julí, sees it as a saving grace that Tales was kidnapped and his daughter came to her. She seeks to save Julí and teach her to be a proper Christian. The friars celebrate, as they won Tales’s lawsuit, gave his land away, and forced him out of his home via court order. When Tales returns and learns the news, he sits beside his father and barely speaks the entire day.

Simoun stays with Cabesang Tales. He knows a bit of what happened and offers Tales a pistol, which he refuses. Sister Penchang and others come by to look at Simoun’s jewels; he possesses a great fortune. Simoun asks Tales if he has anything he might want to buy or sell.