Elías comes to ask Ibarra a favor, saying that Ibarra has nothing to thank him for since they have both saved each other’s lives now. Elías tells Ibarra not to tell anyone about his warning, not because Elías fears being caught, but because he thinks it’s best if Ibarra’s enemies think he is unprepared. Ibarra is surprised to hear that he has enemies, but Elías tells him that everyone does: “enmity is the law of life.” Ibarra realizes out loud that Elías isn’t simply a boatman or a peasant like he seems, but Elías ignores him, saying that Ibarra has enemies because “in life it’s not criminals who provoke great hatred, it’s honest men.” Ibarra says that he regrets the yellow man’s death, since they could have learned more from him, but Elías replies that “God has judged him” and thus killed him. He continues on, explaining that he doesn’t believe in miracles or chance because they suggest that God does not know the future. Ibarra is surprised by Elías’s philosophical nature, but Elías explains that he has “had to believe a great deal in God because I have lost my belief in men.”
The most prominent people of the province dine together, and a telegraph operator arrives with a message for Captain Tiago: the Captain General will visit Tiago’s house tonight. Tiago panics at the news. Suddenly, Father Dámaso appears and is greeted by everyone except for Ibarra. He makes continuous insulting comments about native Filipinos, referring to them as “indios” and saying that they travel to Europe and think they’re superior, a pointed reference to Ibarra. He also states that “the hand of God comes into play” and “in this life the fathers of such vipers are punished. They die in jail,” referring to Ibarra’s father. Ibarra is incensed and attacks Father Dámaso, nearly killing him. Though he says he’s calm, he angrily exposes Father Dámaso’s exhumation of his father and lifts his arm to stab him, but María Clara holds his arm back, and he lets go of Father Dámaso.
News of the dramatic scene spreads through the town, as do rumors that Father Dámaso is dead. Townspeople debate the conflict, some siding with the priest and some with Ibarra. Ibarra is excommunicated from the church, and María Clara is inconsolable, constantly sobbing despite Isabel’s attempts to console her. Captain Tiago forbids her from speaking with Ibarra until his excommunication is rescinded. Tiago arrives home and announces that Father Dámaso has ordered María Clara and Ibarra’s engagement broken off, threatening Tiago with condemnation in life on earth and the next life if it continues. Father Dámaso has also told Tiago that a relative of his is coming from Spain, instructing María Clara to marry him instead. Though María Clara is deeply upset, she obeys her father because she is a dutiful daughter and Christian, and she is alarmed by the excommunication as well as the threats to her father.
Elías’s religious devotion underscores the dominance of religion in life in San Diego, since even a criminal is deeply religious. Furthermore, Elías seems to align himself with Ibarra’s belief that Christianity is ultimately a force for good, even if some of the people in the church are corrupt, since he is deeply opposed to much of the church leadership but nonetheless considers himself staunchly Christian.
Though Ibarra’s status as a mestizo—someone with partial native Filipino heritage—does not often come up, Father Dámaso refers to it in a very derogatory manner, essentially accusing Ibarra of acting above his station since returning from Europe. The fact that Father Dámaso makes these comments at Ibarra’s own party illustrates how deeply ingrained these prejudices are in Philippine society. Yet Father Dámaso’s remarks do put him at risk when he makes the mistake of insulting Ibarra’s father, which prompts Ibarra to attack him. This attack puts María Clara, who is the goddaughter of Father Dámaso in addition to being Ibarra’s fiance, in a very difficult position, prompting her to interfere by stopping Ibarra from committing a serious act of violence. This scene is a defining moment for María Clara, who has acted mostly passively throughout the novel thus far.
Tiago’s fear at the threat of being excommunicated illustrates how powerful the church is as an institution in Philippine life, and how devastating that fate would be. Yet it also shows his lack of principals and loyalty--despite being kind to Ibarra, the man who would be his son-in-law, throughout the novel, he distances himself from him when his own future is threatened. He even sacrifices his daughter’s happiness, quickly planning to marry María Clara off to someone else.