López de Legazpi, after hearing that Manila has been conquered, follows Goiti and Salcedo to the city in 1571.
Here, he forms a peace pact with the native Muslim councils, Rajahs Suliman, Matanda, and Lakandula.
Both groups agree to organize a city council, consisting of two mayors, twelve councilors and a secretary.
López de Legazpi finally establishes a permanent settlement here on June 24, 1571, and orders the construction of the walled city of Intramuros.
He proclaims the town as the island's capital and permanent seat of the Spanish colonial government in the western Pacific Ocean.
With the help of Augustinian and Franciscan friars, he establishes a government on the islands, becoming the first Spanish governor of the Philippines, and works to convert the natives to the Catholic religion.
Those who oppose his rule are tortured and executed, while those who supported him are awarded with encomiendas.