I. Introduction

In Philippine public law, three powers are traditionally described as the inherent powers of the State:

Police Power
Power of Eminent Domain
Power of Taxation

They are “inherent” because they belong to the State by virtue of sovereignty itself and exist even if the Constitution were silent about them. The Constitution does not create these powers; it recognizes and regulates them.

These powers are indispensable for the State to function: police power to regulate liberty and property for the common good; eminent domain to appropriate private property for public use upon just compensation; and taxation to raise revenue for public needs. Yet, they are all constrained by the Constitution, particularly the Bill of Rights, and by long-standing jurisprudence.

This article provides a structured and comparative discussion of these three powers in the Philippine context—covering their nature, sources, requisites, limits, and how the Supreme Court has distinguished and harmonized them.

II. Inherent Powers of the State: General Features

Though distinct, the three powers share common characteristics:

They are inherent in sovereignty. Even without constitutional text, any organized State must have the ability to regulate behavior, appropriate property for public needs, and raise revenue.
They are primarily lodged in the legislature. Congress, as the policy-making body, is the usual repository. Implementation is delegated to the Executive and, within limits, to local government units (LGUs).
They are limited by the Constitution.
- Due process (substantive and procedural)
- Equal protection of the laws
- Non-impairment of contracts (with nuances)
- Religious freedom and other fundamental rights
- Specific guarantees such as the requirement of just compensation in eminent domain, and constitutional restrictions on taxation.
They aim at the public welfare. Any exercise that does not reasonably relate to the public interest is vulnerable to invalidation.

Despite these similarities, the object, method, and effect on private rights differ significantly for each power.

III. Police Power

A. Concept and Purpose

Police power is often called the most pervasive and least limitable of the three powers. It may be defined as:

The power of the State to enact laws and regulations in furtherance of the health, safety, morals, and general welfare of the people, even if such laws interfere with personal liberty or property.

The Constitution does not explicitly define police power, but it is recognized as inherent and is implied in the general welfare clause.

B. Constitutional and Statutory Basis

Constitutional foundation: Implied in Article II (State policies) and Article III (Bill of Rights), and concretized through:
- Article XII (National Economy and Patrimony)
- Article XIII (Social Justice and Human Rights)
Local Government Code (LGC):
- Section 16 (General Welfare Clause): grants LGUs the power to enact measures to promote health, safety, peace, order, comfort, and convenience of inhabitants.
- Specific provisions empower sanggunians to enact ordinances on zoning, business regulation, environmental protection, etc.

C. Requisites of a Valid Exercise of Police Power

Classically, jurisprudence speaks of the “lawful subject” and “lawful means” tests:

Lawful Subject: The regulation must concern the public welfare (health, safety, morals, comfort, or general welfare).
Lawful Means: The measures adopted must be reasonable, not oppressive, and must have a real and substantial relation to the object sought to be attained.

If either element is missing, the measure is unconstitutional as an invalid exercise of police power.

D. Typical Applications

Regulation of businesses and professions
- Licensing of hotels, nightclubs, restaurants, and amusement places
- Regulation or closure of establishments injurious to public morals or safety
Zoning and land use regulations
- Designation of industrial, commercial, and residential zones
- Prohibition of certain structures in specific areas (e.g., fire zones, danger zones)
Public health and safety measures
- Quarantine regulations
- Mandatory vaccination programs (subject to religious and bodily autonomy issues)
- Sanitary and building codes
Public morals and order
- Regulation of obscene materials, gambling, prostitution, vices
- Curfew ordinances and restrictions on minors

E. Police Power vs. Confiscation

As a rule, if a legitimate regulation incidentally reduces property values or restricts uses, no just compensation is due; this is a burden that citizens must bear for the common good.

However, when regulation goes so far as to effectively deprive an owner of all beneficial use of property—without any meaningful link to public welfare—courts may treat it as a taking requiring just compensation (blurring lines with eminent domain).

IV. Power of Eminent Domain

A. Concept

Eminent domain is:

The power of the State to take private property for public use upon payment of just compensation.

Unlike police power, which mainly regulates, eminent domain appropriates or directly interferes with ownership.

B. Constitutional Basis

Article III, Section 9, 1987 Constitution:

“Private property shall not be taken for public use without just compensation.”

This is both a grant (recognition) and a limitation. The State may take private property, but only for public use and with just compensation.

C. Requisites: “Taking”

Philippine jurisprudence has developed a multi-element test for “taking”:

Entering private property
More than momentary or intermittent
Under legal authority
Devoted to public use or otherwise injuriously affected
Owner is substantially deprived of beneficial use or enjoyment

If these are present, a compensable taking generally occurs—even without formal expropriation.

D. Public Use vs. Public Purpose

“Public use” has evolved into a broad concept closer to “public purpose” or “public advantage.” Examples:

Roads, bridges, ports, public buildings
Public housing, slum clearance, urban renewal
Infrastructure projects (dams, power plants, expressways)
Even transfers to private entities if the ultimate purpose is public (e.g., utilities, tollways), subject to limitations.

The key is that society as a whole, or a substantial segment, must benefit—not merely a private group.

E. Just Compensation

Just compensation = full and fair equivalent of the property taken:

Generally measured by fair market value at the time of taking
May require consideration of:
- Nature and character of the property
- Actual uses and potential uses
- Consequential damage (diminution of value of the remaining property)
- Consequential benefits (sometimes offset, subject to rules)

The determination of just compensation is ultimately a judicial function, even if laws give initial valuation formulas to administrative bodies.

F. Procedure: Expropriation

Typically involves:

Filing of Complaint for Expropriation by the government or authorized entity.
Judicial determination of authority to expropriate and public use.
Deposit or payment of provisional value before taking possession (as required by statute).
Trial on just compensation, often requiring commissioners or appraisers.
Payment of final award and transfer of title.

Local governments may exercise eminent domain under the LGC, subject to:

Prior valid ordinance authorizing expropriation;
Effort to negotiate with the owner;
Limitations such as respect for religious, charitable, or educational institutions, with some exceptions.

V. Power of Taxation

A. Concept and Rationale

Taxation is:

The power of the State to impose and collect proportionate contributions from persons and property for the support of the government and public needs.

It is often described as the “lifeblood of the government”; without taxes, the State cannot maintain its operations.

B. Constitutional Basis

Article VI, Section 28(1), 1987 Constitution:

“The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation.”
Article X authorizes local taxation and fiscal autonomy of LGUs.
Other provisions:
- Tax exemptions and privileges for charitable, religious, and educational entities (subject to conditions)
- Power of the President to grant tariff and customs exemptions under delegated authority
- Limitations on appropriations and use of taxes collected for special purposes.

C. Nature and Characteristics of Taxation

Inherent and plenary – subject to constitutional and international law limits.
Generally legislative – Congress decides what to tax, whom, how much, and for what purpose, subject to reasonableness and constitutional guarantees.
Compulsory – non-payment leads to penalties or enforcement actions.
Territorial – typically applied to persons and properties with sufficient nexus to the Philippines (residence, source, situs, or nationality).

D. Doctrines and Limitations

Public Purpose Doctrine Taxes must be imposed for a public purpose. The term is broad and covers:
- Government operations
- Social welfare and economic development programs
- Regulatory schemes (where tax is used to discourage or control activity)
Uniformity and Equity
- Uniformity: All taxable articles or persons of the same class are taxed at the same rate.
- Equity: Tax burden should be distributed based on the taxpayer’s ability to pay; the system should be progressive rather than regressive.
Non-confiscatory A tax that is so excessive as to virtually confiscate property can be invalidated under due process. Courts, however, give wide latitude to Congress.
Non-impairment of Contracts While taxation may incidentally affect existing contracts, it cannot be wielded to destroy contract obligations arbitrarily, subject to the State’s reserved sovereign power.
Religious Freedom Religious entities enjoy certain tax exemptions for property actually, directly, and exclusively used for religious, charitable, or educational purposes, though these exemptions are strictly construed.

E. Types of Taxes (Philippine Setting)

National Taxes (imposed by Congress and administered by BIR/customs)
- Income tax
- Value-added tax (VAT)
- Excise taxes
- Documentary stamp taxes, etc.
Local Taxes (imposed by LGUs under the LGC)
- Business taxes
- Real property tax
- Community tax
- Franchise tax, professional tax, etc.
Special Assessments and Regulatory Fees
- Public improvements (e.g., betterment levy)
- License fees: sometimes blur with taxes; primary purpose test is crucial.

F. The Primary Purpose Test (Tax vs. Police Power)

If the primary purpose is revenue, the imposition is a tax, even if it incidentally regulates.

If the primary purpose is regulation (e.g., control of a business), and the fee just covers the cost of regulation, it is a license fee under police power.

VI. Comparative Analysis

To understand these powers fully, it helps to compare them systematically.

A. As to Primary Purpose

Police Power: To regulate liberty and property for public welfare (health, safety, morals, general welfare).
Eminent Domain: To appropriate private property for public use (broadly construed as public purpose).
Taxation: To raise revenue for the support of government and promotion of the general welfare, often with incidental regulatory effects.

B. As to Effect on Property

Police Power:
- Imposes restrictions on use of property.
- Property is not appropriated by the State; owner retains title, though use may be limited.
- Losses incidentally suffered are generally non-compensable, being the price of citizenship.
Eminent Domain:
- Involves taking, damaging, or destruction of property.
- State acquires title or imposes a permanent burden.
- Owner is entitled to just compensation.
Taxation:
- Results in transfer of a portion of property (money) to the State.
- Compensable only in the sense that the taxpayer receives public services but not individualized consideration.
- No individual “just compensation” is required; what is required is fairness of the tax system.

C. As to Need for Just Compensation

Police Power: No just compensation, even if serious loss occurs, so long as regulation is lawful, reasonable, and for public welfare.
Eminent Domain: Just compensation is indispensable. Any taking for public use without just compensation violates the Constitution.
Taxation: No “just compensation” as such. The limitation is that taxes must not be confiscatory or arbitrary.

D. As to Source and Location of the Power

Police Power:
- Inherent in the State, primarily exercised by Congress.
- Delegated to LGUs via the LGC’s general welfare clause.
- Also delegated to administrative agencies with regulatory mandates.
Eminent Domain:
- Inherent but requires legislative authority to exercise.
- Government agencies (e.g., DPWH, NIA, NAPOCOR) and LGUs may expropriate if authorized by statute or charter.
Taxation:
- Primarily Congressional power under Article VI.
- Delegated to LGUs under Article X and the LGC, subject to guidelines and limitations.

E. As to Forms of Delegation

Police Power Delegation:
- Broad delegation to LGUs through the general welfare clause.
- LGUs may craft ordinances tailored to local conditions (e.g., traffic rules, noise ordinances).
Eminent Domain Delegation:
- Strictly construed. LGUs must comply with statutory conditions (ordinance, prior offer to buy, scope limitations).
- Government-owned or -controlled corporations and public utilities often have special charters allowing expropriation.
Taxation Delegation:
- Delegation to LGUs is express and enumerated (what taxes may or may not be imposed).
- Administrative agencies may be authorized to fix rates or implement tax laws, but cannot create taxes without statutory basis.

F. As to Relationship with the Bill of Rights

All three powers must conform to the Bill of Rights:

Police Power may limit rights such as liberty, privacy, and property— but measures must pass due process and equal protection scrutiny.
Eminent Domain directly implicates Section 9, Article III on taking and just compensation.
Taxation engages due process, equal protection, and certain property guarantees; it also interacts with religious and academic freedoms when exemptions or burdens affect churches and schools.

Courts often balance individual rights against the pressing demands of public welfare, recognizing that no right is absolute, but also that state powers are not boundless.

VII. Interplay and Overlaps

In practice, the powers frequently overlap:

Police Power and Taxation
- “Sin taxes” on alcohol, tobacco, sugary drinks, or carbon emissions have both revenue and regulatory objectives.
- Courts look at the dominant purpose to classify the imposition, but often uphold it as a valid exercise of either, or both, so long as constitutional standards are met.
Police Power and Eminent Domain
- Zoning laws may prohibit certain uses, diminishing property value. If the State merely regulates, it’s police power.
- If regulation becomes so burdensome as to deprive the owner of all reasonable use or permanently occupy the property, courts may require just compensation, treating it as a “regulatory taking.”
Taxation and Eminent Domain
- Extremely high or discriminatory taxation may have a confiscatory effect, but courts are cautious to label taxation as a disguised expropriation.
- In exceptional cases, a tax or levy targeted at a specific property or owner, leaving no beneficial use, may be questioned as unconstitutional.

Despite overlaps, Philippine jurisprudence typically upholds State measures, presuming validity, and only strikes them down when palpably arbitrary, oppressive, or violative of explicit constitutional commands.

VIII. Contemporary Issues in the Philippine Context

While doctrines are relatively stable, their application evolves with societal changes:

Urban development and relocation
- Expropriation for infrastructure and urban renewal intersects with rights of informal settlers, social justice, and due process (notice, consultation, humane relocation).
Environmental regulation
- Police power is invoked to justify bans, moratoria, and strict standards on mining, logging, plastic use, and pollution.
- Property owners may claim regulatory taking; courts balance environmental protection (often backed by constitutional environmental rights) against individual property rights.
Progressive taxation vs. regressivity
- The constitutional call for a progressive system of taxation pressures lawmakers to redesign tax structures that often fall heavily on consumption (which tends to be regressive).
- Controversies over tax amnesties, incentives, and exemptions also test “equity” and “uniformity.”
Business regulation in the digital age
- New forms of commerce (e-commerce, fintech, ride-hailing, online content platforms) challenge traditional police power and taxation paradigms.
- The State adapts regulations and tax measures to capture value from these sectors while respecting due process and innovation.
Public–private partnerships (PPPs)
- Eminent domain is frequently used in PPP projects (expressways, airports, utilities).
- This raises questions about when taking benefits private concessionaires and whether “public use” remains satisfied.

IX. Conclusion

Police power, eminent domain, and taxation are the core tools through which the Philippine State interacts with liberty and property:

Police power regulates conduct and property use in the name of public welfare, without obligation to compensate, provided the regulation is reasonable and lawful.
Eminent domain allows the State to take private property for public use, but only upon payment of just compensation, with “public use” understood broadly but not infinitely.
Taxation funds government operations and public programs through compulsory contributions, constrained by requirements of public purpose, uniformity, equity, and due process.

All three are indispensable for governance yet dangerous if left unchecked. The Constitutions of 1935, 1973, and 1987, together with a rich body of Supreme Court decisions, have carved out a delicate balance: enabling the State to pursue social justice, development, and security while maintaining the centrality of human rights and the rule of law.

Ultimately, the vitality of these doctrines depends not just on textual formulas, but on continual judicial vigilance and public engagement, ensuring that in the use of these inherent powers, the State remains true to its commitment to protect and enhance the dignity, rights, and welfare of all its people.