In Philippine law, a Power of Attorney is an instrument by which one person, as principal, appoints another, as agent, the power to perform certain specified acts or kinds of acts on behalf of the principal. While a General Power of Attorney (GPA) covers the management of a business or general administration, a Special Power of Attorney (SPA) is required for specific, high-stakes transactions where the law demands clear, unequivocal authorization.

The governing law for SPAs is primarily found in Title X (Agency) of the Civil Code of the Philippines (Articles 1868 to 1932).

When an SPA is Mandated by Law

Under Article 1878 of the Civil Code, a Special Power of Attorney is strictly required in the following instances:

Payments: To make such payments as are not usually considered as acts of administration.
Novations: To effect novations which put an end to obligations already in existence at the time the agency was constituted.
Compromises and Arbitrations: To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action, or to abandon a prescription already acquired.
Waiving Rights: To waive any obligation gratuitously.
Real Estate Transactions: To enter into any contract by which the ownership of an immovable (land/buildings) is transmitted or acquired either gratuitously or for a valuable consideration.
Gifts: To make gifts, except customary ones for charity or those made to employees in the business managed by the agent.
Loans: To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of the things which are under administration.
Leases: To lease any real property to another person for more than one year.
Services: To bind the principal to render some service without compensation.
Partnerships: To bind the principal in a contract of partnership.
Guaranty and Suretyship: To obligate the principal as a guarantor or surety.
Encumbrances: To create or convey real rights over immovable property (e.g., Real Estate Mortgage).
Inheritance: To accept or repudiate an inheritance.
Ratification: To ratify obligations contracted before the agency.
Acts of Strict Ownership: Any other act of strict dominion.

Essential Requirements for a Valid SPA

For an SPA to be legally binding and enforceable against third parties (such as banks, the Register of Deeds, or courts), it must meet several formal and substantive criteria:

1. Capacity of the Parties

Both the Principal (the one granting the power) and the Attorney-in-Fact (the agent) must have the legal capacity to act. The principal must be of legal age and of sound mind at the time of execution.

2. Specificity of Powers

The "Special" in SPA refers to the specificity of the act. A broad statement like "to do all things necessary" is often insufficient for acts listed under Article 1878. The document must clearly describe the specific act authorized (e.g., "To sell the property covered by TCT No. 12345").

3. Written Form

While an agency can sometimes be oral, Article 1874 explicitly states that when a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

4. Notarization

To be considered a public document, the SPA must be notarized by a Notary Public. Notarization converts a private document into a public one, making it admissible in evidence without further proof of its authenticity and due execution.

Execution Outside the Philippines (Apostille)

If the principal is residing abroad, the SPA must still be executed according to Philippine legal standards to be valid in the Philippines.

Apostille Convention: Since the Philippines is a member of the Hague Apostille Convention, documents executed in other member countries (e.g., USA, UK, Japan) no longer require "red ribboning" by the Philippine Consulate. Instead, they must be Apostillized by the competent authority in the host country.
Consularization: If the country where the SPA is signed is not a member of the Apostille Convention, the document must be authenticated by the Philippine Embassy or Consulate in that jurisdiction.

Legal Effects and Limitations

Binding Nature: Acts performed by the Attorney-in-Fact within the scope of the SPA are deemed acts of the principal.
Acts Beyond Scope: If an agent acts beyond the powers specified in the SPA, the act is unenforceable against the principal unless the principal ratifies it, either expressly or impliedly.
Fiduciary Duty: The Attorney-in-Fact is bound by a fiduciary duty to act in the best interest of the principal. They cannot, for instance, purchase the property they are tasked to sell unless the principal's express consent is given.

Extinguishment of the SPA

An SPA is not permanent. Under Article 1919, it is extinguished by:

Revocation by the principal at will (provided notice is given to the agent and relevant third parties).
Withdrawal of the agent.
Death, civil interdiction, insanity, or insolvency of the principal or of the agent.

Note: If the agency was constituted in the common interest of the principal and the agent (an "Agency Coupled with an Interest"), the death of the principal may not automatically terminate the SPA.

Dissolution of the firm or corporation which entrusted or accepted the agency.
Accomplishment of the object or purpose of the agency.
Expiration of the period for which the agency was constituted.