TYPES OF POWER

The inherent powers of the state are police power, the power of eminent
domain, and the power of taxation. The state possesses such powers even if they are
not stated in the constitution. The following diagram shows the differences among these
powers.

POLICE POWER POWER OF POWER OF

EMINENT DOMAIN TAXATION

As to subject Regulates both liberty Affects only property Affects only property
and Property rights rights

As to who Exercised only by the Exercised by the Exercised only by

exercises: government national government, the government
local government
units, and
government-owned or
controlled
corporations pursuant
to their charters.

As to property Property taken is Property is Property is

taken often harmful to the wholesome or not wholesome but is
public (noxious) or harmful to the public being taken as a
intended for a but is being taken for means of sustaining
harmful purpose and public use or the operations of
may thus be purpose. government.
destroyed.

As to Compensation is Compensation is the Compensation is the

compensation intangible, an full and fair equivalent protection given and
altruistic feeling that of the property taken. public
the individual has improvements
contributed to the instituted by
public good. government for the
taxes paid.

Generally, these powers are limited by the Bill of Rights in the Constitution,
although in some cases the exercise of the power may transgress specific constitutional
guarantees. In these instances, the court in a proper case may annul the improvident
exercise of government power.
Police Power
Police power is defined as the power inherent in the State to regulate liberty and
property for the promotion of the general welfare. It is the most pervasive, the least
limitable, and the most demanding of the three powers. The justification is found in the
Latin maxims: salus populi suprema lex (the welfare of the people is the supreme law)
and sic utere tuo ut alienum non laedas (use your own property in such a manner as not
to injure that of another).
Such a power cannot be bargained away by a treaty or a contract. To implement
it, the power of taxation may be used. Even the power of eminent domain may be
employed to implement police power. The overarching consideration here is always the
welfare of the people, such that police power may be combined with taxation and
eminent domain to achieve the objective.
The objective can be manifested in the enactment of a law meant to exercise the
police power of the state to regulate or govern certain activities or transactions of
individulas. The law could be given retroactive effect and impair vested rights or
contracts. Police power legislation is applicable not only to future contracts, but equally
to those already in existence. Non-impairment of contracts or vested rights clauses will
have to yield to the superior and legitimate exercise by the state of its police power.
For example, despite the retroactive effect of Presidential Decree No. 957
(Subdivision and Condominium Buyers Protective Decree) on contracts involving
subdivisions and condominiums, there is no violation of the non-impairment of contracts
provision of the Constitution because the decree is a valid exercise of police power, and
police power prevails over contracts. PD No. 957 was intended to protect subdivision
housing and condominium unit buyers from unscrupulous developers, realtors and
sellers.
The right of the state to regulate medical education as an exercise of police
power has also been recognized by the Supreme Court. It is true that the court has
upheld the constitutional right of every citizen to select a profession or course of study
subject to fair, reasonable, and equitable admission and academic requirements.
Nevertheless, like all rights and freedoms guaranteed by the Charter, the exercise of
this right may be regulated to safeguard health, morals, peace, education, order, safety,
and the general welfare of the people. This regulation is especially crucial in the field of
medicine because intended to protect the public from the potentially deadly
consequences of incompetence and ignorance.
Power of Eminent Domain
Eminent domain is the inherent right of the state (and of those entities to which
the power has been lawfully delegated) to condemn private property to public use upon
payment of just compensation. The power is exercised through a petition for
expropriation filed in the Regional Trial Court, where the expropriating entity is required
to pay an initial deposit to take immediate possession of the property. After the court
approves the payment of the initial deposit, it authorizes the takeover of the property
through a writ of possession and condemn it. The court then determines the just
compensation for the property, which is the second stage of the expropriation
proceedings.
In the exercise of eminent domain, the following considerations must be
addressed: (1) the adequacy of the compensation; (2) the necessity of the taking; and
(3) the public-use character of the purpose of the taking.
In expropriation proceedings, just compensation is defined as the full and fair
equivalent of the property taken from its owner by the expropriator. To measure is not
the taker’s gain, but the owner’s loss. The word “just” is used to intensify the meaning of
the word “compensation” and to thereby convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full, and ample. The
constitutional limitation of “just compensation” is considered to be a sum equivalent to
the market value of the property, broadly defined as the price fixed by the seller in open
market in the usual and ordinary course of legal action and competition: or the fair value
of the property; as between one who receives and one who desires to sell it, fixed at the
time of the actual taking by the government.
Just compensation is decided upon the court. Any valuation for just
compensation laid down in the statutes may serve only as guiding principle or one of the
factors in determining just compensation, but it may not substitute the court’s own
judgment as to what amount should be awarded and how to arrive at such amount. The
executive department or the legislature may make the initial determinations, but when a
party claims a violation of the guarantee in the Bill of Rights that private property may
not be taken for public use without just compensation, no statute, decree, or executive
order can mandate that its own determination shall prevail over the court’s findings.
Much less can the courts be precluded from looking into the “justness” of the decreed
compensation.

Power of Taxation
Taxation is the power of the state to assess and collect taxes. These taxes are
necessary to run the government. Indeed, taxes are the lifeblood of the nation. Without
them, the operations of the government would grind to a halt. Taxes have been with us
since the time of Jesus. When Christ was asked whether taxes should be paid, he said:
“Render unto Caesar’s what is Caesar’s.” Indeed, taxes are a certainty, explaining the
aphorism that “two things are certain in life: death and taxes.”
Taxes are imposed and collected to enable the government to pay its debts,
provide for the defense of the state, and promote general welfare. The scope of
“general welfare” is so broad that there can be endless uses to which taxing power can
be applied. The state, employing its sovereign prerogative, is also not limited by the
practice of taxation of other states. Because taxation is an inherent power of the state, it
can select the subjects of taxation without violating the constitution.
The state imposes taxes for the following reasons: (1) to raise revenue; (2) to
regulate; and (3) to protect. The principal reason why taxes are assessed and collected
is to gather funds for the operation of the government. Government employees have to
be paid. Public schools, hospitals, and airports have to serve the public. Soldiers
fighting the wars being waged by the state have to be furnished with weapons and daily
supplies. Philippine embassies have to continue to cater to the needs of Filipinos
overseas and conduct foreign relations. Without the revenues from taxes, the
government would be at a standstill. The government must take care, however, not to
overtax the citizenry. Otherwise, it would be oppressive and serve as “the power to
destroy.”
Taxation can also be employed to regulate activities deemed inimical to public
welfare. For one thing, the government regularly increases the taxes on cigarettes and
alcohol because of their harmful effects on humans. Called “sin taxes,” these are levied
to discourage the consumption of cigarettes and alcohol. Such impositions are made
even if the tax collection would not be sizeable or the purpose of tax collection is not the
primary consideration.
For another, taxation is used to protect local industries. Before the advent of free
trade, tariffs were imposed to make locally made products competitive with imported
ones. Theoretically at least, Filipinos would prefer relatively cheaper local products than
more expensive imported ones. This aspect of the tax power is known as “the power to
keep alive.”