During pre-Spanish times the port of Pandan was an important trading post for Chinese and interisland vessels, and one of the commodities once traded there was bamboo. With the arrival of the Spaniards came the project to identify the names of places in the Philippines. A Spaniard came to Pandan and asked the name of the place. Thinking that the Spaniard wanted to know the name of the bamboo floating in rafts on the Baggoc River waiting to be traded, they answered "kawayan." The Spaniard then listed the place's name as Caoayan.
The town of Caoayan Ilocos Sur was believed to have been established and created as a separate municipality in 1824. Records of the town from the mid 1800 up to 1991 are not available due to the great conflagration that happened in 1991, which damaged the Old Spanish convent, were records had been kept.
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