Chop the serrano ham in cubes and cook it in the milk on medium heat for about 3min from the point where it starts steaming.
Cook the onion in a bit of the olive oil from the recipe over medium-low heat until soft and translucent.
Add the garlic and cook for a few seconds. Don't let it become golden.
Add the rest of the olive oil, salt, nutmeg and flour and mix using a whisk over medium heat.
Cook the mix for a minute from the moment it starts boiling.
Turn the heat off and add the milk little by little and whisking in between to make sure no lumps form.
Once all the milk has been incorporated return to a medium heat and whisk constantly until it starts boiling.
Add the manchego cheese and mix.
Transfer to a container and cover with cling film. Make sure the cling film touches the surface of the bechamel sauce so a skin doesn't form.
Once cooled to room temperature take to the fridge for at least 2 hours and a maximum of 4 days.
Prepare 3 bowls: one with flour, the other with egg and water whisked together and the last one with breadcrumbs.
Make ovals or balls on your hands and pass through the flour, always removing the excess. Make this with all of them first so you don't bread your hands.
Then pass through the egg using always the same hand and make sure the excess drips off.
Finally pass through the breadcrumbs with the other hand always.
Heat the oil over medium heat, it should bubble when the croquetas go in.
Fry until golden and serve immediately.