In September 1898, he became the Governor-General of the Philippines during the Spanish–American War after the United States of America took control of Manila after the 1898 Battle of Manila. The capital of the Spanish Philippines was at that time in Iloilo. While fighting with the Americans was over, the Spanish authorities continued to fight the forces of the Philippine Revolution for control of the country outside of Manila and Manila Bay Desiring to save the Visayas and Mindanao from being conquered by Philippine revolutionary forces, de los Rios asked Spain to grant some reforms demanded by citizens of Iloilo. He issued in Iloilo a proclamation to the people of the Visayas calling on them to establish a "Council of Reforms" to be made up of 24 leading citizens, 12 of whom would be selected by popular vote and another 12 to be appointed by the governor-general himself. The granted reforms, however, satisfied only a few ilustrado leaders and the Philippine revolution in Iloilo heated up. The general uprising against the Spanish authorities on Panay, particularly in Iloilo, took place on October 28, 1898. On that day onward, the interior towns of the province of Iloilo were liberated from Spanish control. By the first week of November, only Jaro, Molo, and Iloilo remained in the hands of the Spaniards. On November 21, Jaro was delivered by the Spanish government to the Ilonggo revolutionary forces. His term as Governor-General of the Philippines legally ended on December 10, 1898 when the Treaty of Paris was signed transferring sovereignty of the Philippines from the Spanish Empire to the United States of America. The Philippine Revolution however continued, and would become the Philippine-American War early in 1899. With the Spanish army being besieged by the revolutionary troops in the positions which they held in Iloilo and Molo, and being threatened by a decisive attack, the Spanish government under De los Rios eventually opened up negotiations with the Ilonggos. The outcome of the negotiations was the evacuation of Molo and Iloilo City by the Spanish troops and their subsequent surrender to the native forces under the command of Gen. Martin Delgado at Plaza Alfonso XII on December 23, 1898 which implied Iloilo City as the last capital of the Spanish Empire in Asia and the Pacific. He left Iloilo and transferred temporarily to Real Fuerza de Nuestra Señora La Virgen del Pilar de Zaragoza in Zamboanga bringing with him the remnants of his colonial forces in the Visayas on the eve of the surrender of the Spanish forces in Visayas to the Ilonggo revolutionaries in December 24, 1898. Thereafter when moved to Zamboanga as his last bastion, he surrendered to the authorities.
In Zamboanga
The Governor-General upon his arrival at Fort Pilar on December 24, 1898 immediately made preparations for the defense against the Philippine revolutionaries. He brought the colonial forces from Cotabato and Lanao and consolidated them all at Fort Pilar. The Governor-General of Mindanao Island, General Jaramillo, transferred his command to General Montero, ex-governor of Cebu, and left for Manila with General Rios in Dec. 1898.
In Manila
General Diego de los Rios brought his troops to Manila in January 1899, before the troops' departure to Spain. The general remained in Manila until 3 June 1899, trying to secure the release of Spanish prisoners from the rebels. General Nicola Jaramillo then took over negotiations.