The corridor of power and progress in Pampanga today is the straight highway spanning the three cities: San Fernando, Angeles and Mabalacat. However, in the early 1700s, it was the straight river Sapang Matulid that flowed from Mexico to Bacolor to Guagua. The seats of power, according to Fray Gaspar de San Agustin, were distributed among them: Mexico "es la corte de Pampanga" (legislative), Bacolor "es la capital" (executive) and Guagua "es igualmente" (co-equal), and they all swarmed with Chinese merchants (there's even a place in Mexico called Parian). Earlier in prehistoric times, the two centers of population and military power were the ancient settlements of Betis and Lubao (probably larger than the current boundaries, covering all of the areas downstream near the delta). It took the colonizers less than a hundred years to shift the political-economic power upstream to the Mexico-Bacolor-Guagua area.
When San Fernando was created right smack between Mexico and Bacolor in 1754, the administrative offices in Mexico started transferring to Bacolor, making Bacolor officially the capital of Pampanga, starting 1755.
Seven years later, in 1762, the British invaded the Philippines, forcing the Spanish colonial government in Manila to transfer to Bacolor. This in turn forced the provincial capital in Bacolor to relocate elsewhere. Fearing British attacks in Bacolor, the provincial officials chose the farthest town they could find: San Isidro in Nueva Ecija (when Nueva Ecija was still part of Pampanga).
Sure enough, the British tried invading Bacolor, sailing from Manila Bay through the Guagua-Pasak River. They were stopped by Kapampangan warriors in Sexmoan (Sasmuan today) who barricaded the river with estacas or stakes (a barrio in Sasmuan was eventually named Estaca, according to the Sasmuan Papers in the Luther Parker Collection). During the commotion, the people of Sasmuan were ordered to evacuate to Cabiao near San Isidro, using the Sapang Matulid that connected to the Pampanga River upstream. A group of women led by Magdalena Pineda resisted the order and stayed behind.
In 1765, when the British Occupation ended, the Spaniards returned the capital to Manila and the Pampanga capital returned to Bacolor. The ex-capital of Pampanga, San Isidro, would later become a center of the Tobacco Monopoly (and renamed Factoria) and capital of the newly created province of Nueva Ecija (1848, before Cabanatuan).
In 1904, the Americans transferred the capital of Pampanga from Bacolor to San Fernando, partly because the all-important Manila-Dagupan Railroad passed through San Fernando and not Bacolor, and partly because the new colonizers wanted to position San Fernando as a showcase of US-sponsored prosperity as opposed to Bacolor which was a bastion of the old and discredited Spanish colonial administration.