Despite uncertainties caused by the COVID-19 crisis, total member savings from Pag-IBIG MP2 reached nearly ₱25.95 billion in 2021. This marked a 95% growth from the ₱13.23 billion collected in 2020.
This pandemic is certainly reshaping Filipinos’ saving behavior, so it’s best to consider all possible options to grow your hard-earned money. Let’s walk you through everything you need to know about the MP2 Savings Program to understand why it’s an investment worth considering and how to get started.
What is Pag-IBIG MP2?
The Modified Pag-IBIG II, better known as MP2, is an optional savings program for current and former Pag-IBIG Fund members who want to grow their savings in addition to their Pag-IBIG regular savings.
MP2 Savings Key Features
The MP2 program makes saving and investing money easy, affordable, and quite profitable for Filipinos. If you're not sure yet whether to open an MP2 account, here are some basic information about the savings program to help you decide.
- Budget-friendly investment - For as low as ₱500 monthly, you can invest in MP2. No penalties if you miss a contribution for certain months (though it's best to regularly remit your MP2 contributions).
- Government-guaranteed savings - You're assured that you won't lose your principal since the Philippine government guarantees it.
- Tax-free dividends - Receive your MP2 dividends without tax deductions either every year or in five years.
- Up to 8% annual dividend rate - The Pag-IBIG MP2 interest rate is higher than the regular Pag-IBIG savings program and even those of bank accounts, time deposits, and other investment vehicles.
- No limit to the amount you can save - Remit as much money into your MP2 account as your budget allows. For one-time payments exceeding ₱500,000, a personal/manager's check is required.
- Multiple MP2 savings accounts - You can open as many MP2 accounts as you'd like. This is ideal if you're saving money for different goals, like for emergencies, tuition fund, travel, retirement, etc.
- Five-year maturity period - Your MP2 savings will mature in five years, after which you can withdraw your money. This makes the MP2 savings program ideal for medium-term investment goals.
What are the Advantages of the MP2 Program?
Like any other investment vehicle, the MP2 Savings Program has a lot of benefits for its investors. Here’s what you need to know.
1. High Annual Interest Rate and Low Required ADB
The MP2 program can let you earn as much as 8% of your savings fund per year compared to other high-yield savings accounts. Check out this table comparing the interest rates of Pag-IBIG MP2 with the rates of banks.
|Savings||Average Daily Balance to Earn Interest||Average Annual Interest Rate|
|BPI Regular Savings||₱5,000||0.0625%|
|EastWest Bank Regular Savings||₱10,000||0.0125%|
|PNB Debit Savings||₱10,000||0.1000%|
|Land Bank ATM Savings||₱2,000||0.0500%|
|China Bank ATM Savings||₱10,000||0.0125%|
|UnionBank Regular Savings||₱25,000||0.1000%|
|AUB Starter Savings||₱1,000||0.1000%|
|Maybank Regular Savings||₱10,000||0.2500%|
|PBCOM Regular Savings||₱5,000||0.1000%|
|Robinsons Bank Regular Savings||₱10,000||0.1250%|
The MP2’s average daily balance to earn interest is computed by multiplying the minimum monthly remittance of ₱500 by 12 months. Although the total average daily balance required to earn interest is much higher in MP2 compared with other banks, the average annual interest is way higher.
2. Option to Withdraw Dividends Each Year or Compound for Five Years
MP2 allows you to withdraw your dividends each year or to add them to your savings account to earn compounded interests. If you choose to withdraw it directly to your bank account, you can use the money to fund essentials or emergencies. On the other hand, if you have it compounded for five years, expect to earn more from your savings.
Here’s a sample computation if you opt to compound the interest:
₱5,776.68 - total earnings for 5 years
PHP 3,797.85 - total earnings for 5 years
Disclaimer: The computation above is a conservative estimate intended for comparison of your possible earnings from MP2 Savings (at 6.96% per annum dividend rate) and from bank savings (at 4% annual interest rate). This does not take into account the exact deductions (taxes or fees), additions, or exact interest earned imposed by banks and Pag-IBIG which vary within the maturity period. It’s important to note that earnings from bank savings are taxable while dividends earned from the MP2 program are tax-free computed against 70% of your fund.
3. You Can Withdraw Your Money Anytime
Although the MP2 savings can be maintained for five years, you still have the option to withdraw your money anytime.
Your savings are backed by the government. But it may be subject to a different computation scheme considering annual dividend performance and other factors.
5. Easy Account Opening Online
By filling out the online MP2 Savings registration form, you can be automatically enrolled and start paying your contributions anytime.
6. Multiple MP2 Savings Accounts
A Pag-IBIG Fund member can have multiple MP2 Savings accounts at the same time.
What are the Risks of the MP2 Program?
If there are benefits to this savings program, there are also drawbacks. Here are some things to take note of.
1. Your Account Matures in Five Years
Compared with bank savings which can be maintained for as long as you want, your MP2 savings matures in five years. You’ll need to open a new MP2 account again when your savings fund reaches maturity.
2. You Won’t Earn Dividends After the Five-Year Lock-In Period
Pag-IBIG automatically stops your dividend earnings if you opt not to claim your money after the five-year maturity period.
Who Can Enroll in the MP2 Program?
You qualify for the MP2 savings program if you belong to any of the following groups:
- Active Pag-IBIG Fund members regardless of monthly income
- Former Pag-IBIG members with other sources of monthly income
- Pensioners, regardless of age, who have paid at least 24 monthly Pag-IBIG I contributions before retirement
Inactive members who have stopped paying Pag-IBIG contributions may enroll in MP2 by resuming their payments until they reach the minimum 24 monthly contribution requirement.
Not registered with the Pag-IBIG Fund yet? You can register online as a Pag-IBIG member and pay contributions for at least 24 months before you can open an MP2 savings account.
How to Apply for Pag-IBIG MP2
You can apply for the MP2 savings program online or in-person at a Pag-IBIG office. Read on to learn how to open an MP2 savings account.
MP2 Online Enrollment Procedure
Here are the steps to applying for the MP2 savings program online:
- Visit the Modified Pag-IBIG II Enrollment page at www.pagibigfundservices.com/MP2Enrollment.
- Enter your Pag-IBIG Membership ID (MID) number, last name, first name, and birthdate (MM/DD/YYYY).
- Type the CAPTCHA code.
- Click the Submit button.
- In the Desired Monthly Contribution field, enter the amount you wish to remit every month for your MP2 savings.
- Select your preferred option from the following dropdown menus:
- Preferred Dividend Payout: Whether you'd like to receive your MP2 dividends every year or by the end of the five-year term
- Mode of Payment: Whether you prefer to pay your MP2 contributions through salary deduction, over-the-counter at any Pag-IBIG branch, or through any Pag-IBIG Fund-accredited collecting partners
- Source of Funds: Your main income source where your MP2 payments will come from
- Click the Submit button.
- Your completed Modified Pag-IBIG II Enrollment Form will be displayed, which contains your 12-digit MP2 account number. You may save this form as a PDF file or print it.
MP2 Manual Enrollment Procedure
If you have other transactions you need to complete at the nearest Pag-IBIG office, then you might as well open your MP2 savings account there. Make sure to check the Pag-IBIG office's operating hours as they can change anytime to follow the government's guidelines.
Pag-IBIG MP2 Requirements
Simply submit the following documents for your MP2 application:
- Valid ID
- Accomplished Modified Pag-IBIG II Enrollment Form
- ATM card or passbook of your bank account where you'd like to receive your MP2 savings and dividends
How to Invest in the MP2 Program
As soon as you're done with your MP2 enrollment, you can start saving under the investment program. You can either make a one-time lump sum payment or a monthly contribution of smaller amounts to your MP2 savings account.
Modes of Payment
There are three major ways to pay your MP2 contribution:
- Salary deduction by your employer
- Personally at any Pag-IBIG branch
- Or through any accredited collection partner
For employees, the best mode of payment is through salary deduction, as MP2 savings are automatically deducted from the salary and remitted to the MP2 account.
For freelancers, entrepreneurs, and unemployed Pag-IBIG members, the most convenient payment mode is through third-party payment channels, especially the online facilities.
Where to Pay Your MP2 Contributions
Over-the-Counter Payment Centers:
- 7-Eleven (Must first secure a Payment Instruction Page from the ECPay website)
- Bayad Center
- M. Lhuillier
- SM Business Centers, including Savemore and SM Hypermarket bills payment counters
Online Payment Channels:
|Pag-IBIG MP2 Online Payment Channels||Payment Methods Accepted|
|Pag-IBIG Online Payment Facility||PayMaya, Visa, Mastercard, and JCB credit cards|
|Gcash app||Gcash wallet|
|Coins.ph app||Coins.ph wallet|
|Moneygment app||Moneygment wallet, bank deposit, PayPal, ECPay, Dragonpay, 7-Eleven|
Whatever online payment facility you use, choose "Modified Pag-IBIG 2" as your payment type and provide your MP2 account number.
How Can I Check My MP2 Online?
You may monitor your posted MP2 contributions through Virtual Pag-IBIG. But before you can do that, you have to create a Virtual Pag-IBIG account first.
After your Virtual Pag-IBIG account is activated, you can already verify your MP2 savings online. Here's how.
- Log in to your Virtual Pag-IBIG account.
- On the left menu, select "MP2 Savings" under the Products tab.
- View your MP2 contribution payments on the screen.
MP2 Savings Program FAQs
1. How much is the Pag-IBIG MP2 contribution?
The minimum amount you can save in your MP2 account is ₱500 per month. This makes Pag-IBIG's savings program one of the most affordable for Filipinos who want to start investing small.
2. Where are contributions invested?
MP2 contributions paid by Pag-IBIG members are invested in Pag-IBIG housing loans (which earn interest paid by member-borrowers), government securities, and corporate bonds. Investing money in fixed securities makes the MP2 a less risky investment compared to stocks and other high-risk instruments.
3. How much dividends will I earn from my MP2 savings?
The annual MP2 dividends you'll receive will depend on the dividend rate set by the Pag-IBIG for a particular year during your investment term. The annual rates vary depending on Pag-IBIG Fund’s financial performance and other factors.
Since 2016, the dividend rates have never fallen below 7%. In the past five years, the average MP2 dividend rate is 7.55%.
For example, if you've been saving ₱500 from 2020 to 2024, you're likely to receive a total dividend of ₱5,718.75 (if you chose to get your dividends annually). Your total dividend will be higher (₱6,266.14) if you opt to get paid the lump sum after your MP2 account's five-year term.
You may check sample MP2 computations at the Pag-IBIG website (Click the Frequently Asked Questions tab to view the sample computations).
4. What is the interest rate of MP2 in Pag-IBIG for 2021?
The final dividend rate for the MP2 program in 2021 is 6%, which the Pag-IBIG Fund announced on March 2022. This rate is lower than those during the pre-pandemic years, but it's still higher compared to other instruments in the market, such as regular bank savings accounts and time deposits.
5. How will I receive my MP2 dividends?
Your MP2 dividends will be credited to your nominated savings or checking account with a Pag-IBIG Fund-accredited bank (e.g., DBP, LANDBANK, etc.).
If you don't have a bank account in the Philippines, your MP2 dividends will be paid via checks.
6. Can I withdraw my MP2 savings before its maturity?
Ideally, like in other investments, it's best to just let the funds in your MP2 account grow until your account matures. This way, you get to maximize your profits.
However, an unfortunate life situation might make withdrawing your MP2 savings necessary. The Pag-IBIG Fund allows early withdrawal under any of the following scenarios:
- Total disability or insanity
- Termination from employment due to health reasons
- Death/Critical illness of the MP2 account holder or an immediate family member
- Migration to another country
- Unemployment due to layoff or company closure
- OFW repatriation from the host country
You may withdraw your savings for a reason other than those allowed by Pag-IBIG. But you'll only receive half of the total dividend earned (if you chose to receive dividends after five years) or only your contributions (if you chose the annual dividend payout option).
7. Can I enroll a new MP2 savings account after maturity?
Yes, you can open new MP2 savings accounts once your existing account matures. This is a good strategy if you wish to invest your money in the long term, like for retirement.
8. What will happen if I don't claim my dividends?
Unclaimed MP2 savings after the five-year maturity will keep on earning dividends (based on the dividend rates of the Pag-IBIG Regular Savings Program). After two years, it will no longer earn dividends and you should just withdraw it.
9. What happens if I decide to pre-terminate my account?
Pag-IBIG allows for account pre-termination. However, the payouts differ depending on the circumstance:
- If the reason for pre-termination is a total disability, retirement, or any other reasons stipulated by Pag-IBIG, you can withdraw your entire savings plus 50% of the dividends earned.
- But if the reason for pre-termination is not listed in the MP2 Savings terms and conditions, you can withdraw your entire savings without any dividends earned.
Investing in the Pag-IBIG MP2 program is a good way to build your savings and fund your financial goals in the future. It makes a great passive income source, too, as you let a small amount of money earn for you.
By religiously contributing each month for five years, you actually build not just a savings fund but a good savings habit. And since it's backed by the government, you’re guaranteed that you won’t lose your money.
-  Pag-IBIG members save record-high P26 B in MP2, up 95% in 2021 (Pag-IBIG Fund press release, 2022)
-  Pandemic ‘tweaks’ Pinoys saving, lending, insurance behavior (Philippine News Agency, 2021)
-  FAQS Pag-IBIG Fund MP2 Savings Program (Philippine Embassy, 2021)
-  Pag-IBIG Fund Online Registration System
-  Modified Pag-IBIG II Enrollment Form
-  Virtual Pag-IBIG Portal