In the midst of the Philippines' most notorious slum, British expat Jane Walker transforms lives by turning rubbish into top-end fashion items.

A unique four-story building houses the Philippine Christian Foundation, an organisation Walker founded 16 years ago to help scavengers at the Smokey Mountain garbage dump in Manila's chaotic bayside Tondo district.

Walker teaches mothers to make colourful bags, purses and jewellery using items commonly discarded by the public - from toothpaste tubes, plastic bottles and lollypop wrappers to magazine pages and soft drink cans.

"It's inspiring when you realise such a simple project helps so many families," Walker, 48, told AFP during a recent visit to the school.

"We design things from laptop bags and iPod cases, computer cases, all ranges of different handbags, shopping bags, clutch bags, fashion accessories and even place mats made from waste paper."

The products are sold in the country's biggest department store chain, as well as to high-end and specialty shops in Australia, Canada, Hong Kong, Japan, the Middle East and Singapore, with price tags ranging from 10 to 100 dollars.

A portion of the proceeds goes to the mothers and the staff, while the rest is used to finance the foundation's operations.

Apart from teaching livelihood skills, Walker's foundation also runs a primary school where up to 500 slum children are enrolled at any given time free of charge.

The building in itself is remarkable and true to the foundation's recycling mantra.

It is made from shipping containers welded and cemented together in what Walker says is the first such structure housing a school anywhere in the world.

Walker first came to the Philippines in the mid-1990s on a soul searching holiday expecting to soak up some sun in a tropical paradise.

Instead she found herself lost in a cab that drove her across Manila's bayside Tondo district and its teeming slums.

She was both amazed and repulsed by Smokey Mountain, a sprawling open dump known for its constantly billowing black smoke that once symbolised everything wrong in the Southeast Asian country known for corruption and crushing poverty.

"It was the most shocking scene for someone coming from the West," Walker said.

"Many slept on the ground, there was no running water, no electricity. They had absolutely nothing. They scratched a living off the garbage."

She returned to her native Southampton haunted by what she saw and was determined to do something about it.

She subsequently quit her high-paying job as a publishing executive and relocated to Manila.

Using her own money and donations from friends, she took over an abandoned warehouse near the dumps and converted it into a school.

Money, however soon dried up, forcing her to look for alternative sources of funding.

"I thought, why not make garbage into something we can profit from," she said. "And that's how it began."

Walker tirelessly scoured the dumps with the mothers, and encouraged their children to enrol in her school.

She became known to slum folk simply as "Ma'am", but the sight of her trudging barefoot through stinking black mud earned her the moniker 'angel of the dump' from the local press and much needed publicity for her cause.

There was an overwhelming response to her appeal for recyclable materials from schools and private companies in the Philippines and abroad.

As word of her work spread, corporate sponsors also lined up to donate cash that enabled her to expand her work, including construction of the new school in 2009 at a cost of one million dollars.

In 2006, Queen Elizabeth made her a Member of the Order of the British Empire in recognition of her work.

The foundation now has about 80 full-time staff, including teachers and social workers, while about 150 mothers regularly turn up for work, according to Marcel Clado, the centre's project manager.

A sponsorship programme also sees private individuals in the Philippines and abroad pay for children's education at the foundation's school or other nearby institutions.

Smokey Mountain was closed in the late 1990s, with an embarrassed government putting up low-cost housing in the area.

But those who still couldn't afford paying for the homes simply moved across the road where another garbage site opened, and Tondo continues to house tens of thousands of Manila's poorest.

Charlita Carceno, a 51-year-old mother whose three children are enrolled at the school, said Walker enabled her to dream of one day finally leaving the dumps.

"I realised there is life beyond our existence and that you can improve your lot if you work hard enough," said Carceno, who sews scraps of material into cloths for kitchen use.

For Walker, reflections such as those by Carceno are the reasons she keeps on going.

"They are the most inspiring group of people," she said.

"They are so poor, yet they have the most positive outlook in life. When I see children starting to learn and families beginning to leave the dumps, I realise I've made a difference. And that's the best reward of all."