In October, 1762, the English took Manila, where the Sultan Amir was found by Dalrymple, who engaged to reinstate him on his throne, if he would cede to the English the north end of Borneo, as well as the south end of Palawan.  This he readily promised, and he was, in consequence, carried back to Sulu and reinstated; his nephew, Alim-ud-deen, readily giving place to him, and confirming the grant to the East India Company, in which the Ruma Bechara joined.

After various arrangements, the East India Company took possession of Balambangan, in the year 1773, and formed a settlement there with a view of making it an emporium of trade for Eastern commodities.  Troops and stores were sent from India, and the population began to increase by settlers, both Chinese and Malays, who arrived in numbers.  In the year 1775, the fort, notwithstanding all the treaties and engagements between Dalrymple and the Sultan, was surprised by the Sulus, and many of the garrison put to death. [Victory over English.] This virtually put an end to the plans of the English, although another attempt was made to re-establish the settlement by Colonel Farquhar, in 1803; but it was thought to be too expensive a post, and was accordingly abandoned in the next year.  This act of the Sulus fairly established their character for perfidy, and ever since that transaction they have been looked upon as treacherous in the highest degree, and, what is singular, have been allowed to carry on their piracies quite unmolested.  The taking of Balambangan has been generally imputed to the treacherous disposition and innate love of plunder among the Sulus, as well as to their fear that it would destroy the trade of Sulu by injuring all that of the archipelago.  But there are strong reasons for believing that this dark deed owed its origin in part to the influence of the Spaniards and Dutch, who looked with much distrust upon the growth of the rival establishment.  Such was the jealousy of the Spaniards, that the governor of the Philippines peremptorily required that Balambangan should be evacuated.  The Sulus boast of the deed, and admit that they received assistance from both Zamboanga and Ternate, the two nearest Spanish and Dutch ports.  These nations had great reasons to fear the establishment of a power like that of the East India Company, in a spot so favorably situated to secure the trade of the surrounding islands, possessing fine harbors, and in every way adapted to become a great commercial depot.  Had it been held by the East India Company but for a few years, it must have become what Singapore is now.

The original planner of this settlement is said to have been Lord Pigot; but the merit of carrying it forward was undoubtedly due to Dalrymple, whose enterprising mind saw the advantage of the situation, and whose energy was capable of carrying the project successfully forward.

Since the capture of Balambangan, there has been no event in the history of Sulu that has made any of the reigns of the Sultans memorable, although fifteen have since ascended the throne.