Published: September 25, 2020 | Updated: October 2, 2020 | Posted by: Venus Zoleta | Personal Finance
Looking for more ways to grow your money over time? The Pag-IBIG MP2 savings program is worth considering. The government-backed savings scheme isn’t like any typical savings account—it’s a low-risk yet high-return investment.
With the Pag-IBIG Fund’s great financial performance every year, MP2 investors can rest easy knowing that their funds are being managed well. This is among the reasons the MP2 program has become increasingly popular in recent years. So much so that MP2 savings collected by Pag-IBIG went up by 176% on January to September 2019 from the same period in 2018.
Interested? Here’s what you need to know about Pag-IBIG MP2 and how to apply for and invest in the savings program.
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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 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’s some basic information about the savings program to help you decide.
You qualify for the MP2 savings program if you belong to any of the following groups:
Inactive members who have stopped paying Pag-IBIG contributions may apply for Pag-IBIG 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 voluntary member and pay contributions for at least 24 months before you can open an MP2 savings account.
You can enroll in the Pag-IBIG MP2 savings program online or in-person at a Pag-IBIG office. Read on to learn how to open an MP2 savings account.
Here are the steps to applying for the MP2 savings program online:
If you have other transactions you need to complete at the nearest Pag-IBIG office, then you might as well open your Pag-IBIG MP2 savings account there. Note that you can transact only at a branch under the general community quarantine (GCQ).
Simply submit the following documents for your MP2 application:
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 Pag-IBIG MP2 savings account.
There are three major ways to pay your MP2 contribution:
For employees, the best Pag-IBIG MP2 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.
|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.
You may monitor your posted Pag-IBIG 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 Pag-IBIG MP2 savings online. Here’s how.
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.
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 PHP 500 from 2020 to 2024, you’re likely to receive a total dividend of PHP 5,718.75 (if you chose to get your dividends annually). Your total dividend will be higher (PHP 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).
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.
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:
You may withdraw your MP2 savings for a reason other than those allowed by Pag-IBIG. But you’ll be paid only 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).
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.
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 must be withdrawn.
Investing in the Pag-IBIG MP2 savings program is a good way to build savings to fund your financial goals in the future. It makes a great passive income source, too. Thus, you should enroll an account immediately, so you have more time to grow your money.