Colonial mentality is the sociological term for the erosion of native culture when it is colonized or conquered by a more advanced civilization.
It is characterized by a marked preference for the conquering civilization's goods, art, music, etc. to the detriment of local culture and industry.
It is generally found in Third World countries that were once under European or American rule, such India under the British Empire, or Latin American countries under Spain and Portugal.
In the Philippines, it is interesting that preference for Spanish culture has not taken root except at the very highest classes (the so-called peninsulares - old rich), despite nearly 400 years of Spanish rule. However, even though the United States has only held the Philippine islands for less than 50 years, colonial mentality with respect to American culture manifests itself at almost all levels of society.
This may be due to widespread dissatisfaction and hatred for the Spanish feudal system, as contrasted with the American tactic of providing education to natives not belonging to the upper classes. Or it may be testament to the effectivity of 20th-century mass-marketing, and thus may not be blamed fully on American colonization.
Whatever the root causes, this attitude is a large contributor to the inability of local products to compete with those of the larger multinationals.
Indeed, the only local industries that seem to be thriving are those that produce fake or imitation versions of their better-known counterparts. Filipinos have the tendency to think that anything produced in the US (and to a lesser degree, European and other foreign countries) are of higher quality than locally-produced goods. Thus, the inroads made by McDonald's versus Jollibee, the local counterpart, despite having inferior products.
Colonial mentality also manifests itself as a preference for physical characteristics of the other race, to the point where pale skin is considered attractive (and half-breeds, or mestizos, are held in higher esteem than natives with darker skin). Bigger/longer noses and light-colored hair are also deemed more attractive than the local flat noses (pango) and black hair. Cosmetic surgery is often used to achieve this "look".
Ironically, foreigners looking for mail-order brides typically look for the more exotic, native-looking women - the kind of women usually passed up by the local men.
Regarded as a major effect of cultural imperialism (although the WU here is different from the sociological meaning).