Pag-IBIG MP2 vs. SSS PESO Fund: Which is the Better Government Savings Program for You?

by Venus Zoleta, on category "Government Services"

November 22, 2018


Pag-IBIG MP2 vs SSS PESO Fund

Choosing between the Pag-IBIG MP2 and SSS PESO Fund to start saving money? Learn about their similarities and differences to come up with a wise decision.
To encourage their members to save and earn additional income, the Pag-IBIG Fund and SSS offer their respective voluntary savings schemes, the Modified Pag-IBIG II (MP2) Program and the Personal Equity and Savings Option (P.E.S.O.) Fund. Both government savings programs are attractive options for Filipinos who don’t have much to save and don’t want to invest in riskier instruments such as stocks and mutual funds.

Common Features of Pag-IBIG MP2 and SSS PESO Fund


Before we flesh out the differences between the two government savings schemes, let’s take a look at their similar features:

  • Optional savings programs
  • Tax-free
  • Guaranteed by the Philippine government (meaning you won’t lose your savings)
  • Open to all regular Pag-IBIG and SSS members, whether OFWs or local workers
  • Higher interest rates than bank rates (savings accounts and time deposits)
  • Monthly payments not required; no penalty for missed monthly payments

Who Can Join the Savings Programs

The biggest difference between the Pag-IBIG MP2 and SSS PESO Fund is their eligibility requirements.

Pag-IBIG MP2 Eligibility Requirements

All Pag-IBIG members can enroll under the enhanced MP2 program regardless of age and monthly income. The improved savings scheme even extends to retirees or pensioners, as long they’re former Pag-IBIG members with at least 24 monthly Pag-IBIG contributions before their retirement.
The Pag-IBIG Fund released the new guidelines for MP2 eligibility requirements in July 2018. Previously, only members with PHP 5,000 monthly income or higher could qualify for the MP2 program. Starting in 2018, this income requirement is waived.

SSS PESO Fund Eligibility Requirements

SSS PESO Fund eligibility
The SSS is stricter when it comes to allowing its members to enroll in the PESO Fund. Any SSS member (including employees, self-employed professionals, voluntary members, and OFWs) who meets these conditions can open an account:

  • 55 years old and below
  • Paid at least six consecutive monthly SSS contributions (under the regular SSS program) within the last 12 months prior to enrollment
  • For self-employed, voluntary, and OFW members: payment of maximum contributions under the regular SSS program
  • No final claim filed under the regular SSS program (retirement, total disability, or death benefits)

How Much Members Can Invest


The Pag-IBIG MP2 and SSS PESO Fund are among the most affordable savings options in the Philippines. This makes the two savings programs ideal for millennials, non-working spouses, kasambahays, and other Filipinos who don’t have much money for saving and investing.
For as low as PHP 500 monthly, you can start saving under the MP2.
The minimum monthly investment for the PESO Fund is higher yet still affordable at PHP 1,000. The savings and earnings of SSS members go to three accounts: retirement/total disability (65%), medical (25%), and general purpose (10%). The general purpose account is allocated for education, housing, and livelihood needs.
With the MP2, you can save as much as you can, as it has no maximum savings amount. SSS, however, allows members to save PHP 100,000 at most per year with the PESO Fund.

Pag-IBIG MP2 vs. SSS PESO Fund Interest Rates


Investments tend to grow faster with the Pag-IBIG MP2 than the SSS PESO Fund.
From 2010 to 2017, the yearly dividend rate of the MP2 has ranged from 4.58% to 8.11% and followed an upward trend.
Meanwhile, earnings with the PESO Fund grow by 1.85% to 3.75% per year based on Treasury Bond and T-Bill rates.
The SSS voluntary savings program may have lower interest rates than those of the Pag-IBIG Fund, but they’re still higher than time deposit rates of 1.13% to 3.20%. This means you can earn faster if you put your money in these government savings programs rather than in bank accounts.

When to Claim Savings

Pag-IBIG MP2 Withdrawal

The MP2 savings and dividends can be claimed after five years. However, the Pag-IBIG Fund allows early withdrawal for cases of total disability, insanity, or unemployment due to health reasons. When a member dies before the five-year maturity period, his or her beneficiaries can claim the savings.
After claiming your funds, you can opt to register for a new MP2 account, reinvest the amount fully or partially as a lump-sum payment, and keep on saving for another five-year term.

SSS PESO Fund Withdrawal

After five years of saving under the PESO Fund, you can claim only up to 35% of your savings from the medical and general purpose accounts. The rest of the fund (65%) can be withdrawn only when you reach the age of 60 or when you file for retirement or total disability with the SSS.
If you withdraw before the five-year retention period, SSS will charge penalty and service fees.

Which is Better: Pag-IBIG MP2 or SSS PESO Fund?

So, which of the two government savings programs suits you better? Here’s a table to help you easily visualize the differences between the Pag-IBIG MP2 and SSS PESO Fund.

Criteria Pag-IBIG MP2 SSS PESO Fund
Age limit None 55 years old
Other eligibility requirements For retirees: At least 24 monthly contributions before retirement
  • At least six consecutive monthly SSS contribution payments within the last 12 months before enrollment
  • For self-employed, voluntary, and OFW members: payment of maximum contributions under the regular SSS program
  • No final claim filed
Minimum investment PHP 500 PHP 1,000
Maximum investment No limit PHP 100,000 per year
Interest rate 4.58% to 8.11% per year 1.85% to 3.75% per year
Number of accounts for enrollment No limit One account only
When to claim savings After five years
  • After five years: 35% of savings
  • At age 60 or upon retirement/total disability: 65% of savings

As you can see the MP2 savings program is more affordable and flexible than that of the SSS. With Pag-IBIG MP2, you can grow money as much as you want to. It’s also easier to start saving with the MP2 because it doesn’t have a lot of conditions for enrollment. It comes as no surprise that savings from Pag-IBIG members keep on increasing every year.
The SSS PESO has its own merits, though. It’s an ideal way to increase your retirement fund, as you can access your funds only when you retire. The PESO Fund is also better as a long-term investment, while the MP2 is designed for short-term and medium-term investing.

Final Thoughts

Considering all their pros and cons, the MP2 and PESO Fund suit different needs.
The MP2 is the better savings option for self-employed and voluntary members, as well as low-income earners with a limited budget, who can’t afford to pay the full maximum monthly SSS contributions. It’s a great way to save up for a big purchase or anything you need in five years, like funding your travel.
On the other hand, the SSS PESO Fund is more suitable for employees, as their employers shoulder a bigger portion of their monthly SSS contributions. If you’re earning a higher income, it can also help you save for retirement.
Whichever savings program you choose, you’re on the right track with your journey to financial freedom.
What do you think? Which of these two government savings schemes will you choose?  If you’re already saving with one, has it worked for you? Leave a comment below!
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