The raid on the Manila office of The Daily Tribune early Saturday was part of a crackdown on opposition groups following Friday's declaration by President Gloria Arroyo of a state of emergency.
"Anyone who even gives the impression of muzzling the press in the land of people power is either incredibly stupid or incredibly daring," the mass circulation Philippine Star said in an editorial.
Police confiscated documents and posted police at the door of the newspaper's office.
Director-General Arturo Lomibao, head of the national police, later told a news conference that the government had "temporarily" taken over the paper as it was being investigated as a possible source of destabilisation".
But late on Saturday Michael Defensor, the president's chief of staff, said he had given orders to the police "not to interfere" with the paper.
The paper came out Sunday with a black bordered frontpage letter from the editor and publisher, Ninez Cacho-Olivares, describing the raid as having "the stench of martial law".
She said there was no interference with the production of its Sunday edition.
The Manila Times said in its editorial: "The raid on the Daily Tribune makes us see what opposition politicians have been warning about: creeping martial law."
University professor Randy David, who was detained on Friday after the state of emergency was declared and later released, said in his column in the Philippine Daily Inquirer: "At 9am on February 24,1986, 20 years ago, Marcos went live on Channel 4, surrounded by his generals, to announce a nationwide state of emergency.
"How uncanny that Ms Arroyo should choose the same date to announce the same draconian measures to suppress the same perceived conspiracy supposedly between the extreme Left and the extreme Right."
Meanwhile, the National Union of Journalists of the Philippines met Sunday to coordinate its response to the move.
The union said it will send a letter formally requesting Arroyo to withdraw her declaration of emergency rule.
The proclamation is an "overkill and should be withdrawn immediately," said Isagani Yambot, publisher of the Philippine Daily Inquirer, adding there was a "real danger to freedom of expression".