Even during these challenging times, there are still plenty of ways for Filipinos, whether you’re in the Philippines or based overseas, to grow your savings. And one excellent and convenient way to do so is through investing regularly in the Pag-IBIG MP2 Savings Program.
By investing in this program, you get to increase your savings by at least 6% every year. That’s at least 100% higher than what regular banks can offer (at a maximum of 3%). And the good news is, it can get higher than that. In fact, in 2019, the declared MP2 dividend rate was 7.23%. Sounds good? It gets even better. To learn more, continue reading the following sections.
Everything You Need to Know About the Pag-IGIB MP2 Savings Program
The Pag-IBIG MP2 is one of the most profitable savings programs offered by the housing state fund for Filipinos who wish to earn more from their hard-earned money. To know exactly if this investment option is something you would like to capitalize on, then read the following basic information that you need to know to get you started.
What is MP2 (Modified Pag-IBIG 2) Membership Program?
The Modified Pag-IBIG 2 (MP2) is an optional savings scheme for members who want to save more and earn higher dividends on top of their regular Pag-IBIG savings.
Yup, you’ve read it right, you need to have regular Pag-IBIG savings account first before you can join in this program. But more on that a little later.
What makes the MP2 savings program profitable is the fact that the HDMF invests the funds collected from this program mostly in its housing loan program, as well as its short-term loan programs. That said, the fund grows through interest payments from borrowers. And the rest is invested in corporate bonds, time deposits, and government securities.
But you really don’t need to know all of those technical and financial terms to get you started on this savings program. You just need to meet the requirements to join and to regularly put in your money into your account for a specified time, based on how you want to profit from this program.
Who is the Pag-IBIG MP2 for?
As mentioned, only those with an active Pag-IBIG Fund membership or those with a source of monthly income and/or Pensioners, regardless of age, with at least an equivalent of 24 monthly savings, can join the program.
That means, if you’re an employee with an active membership or a former Pag-IBIG Fund member with at least 24 months’ worth of contributions in the fund, then you can join this program.
Benefits of Pag-IBIG MP2
There are several reasons why it’s smart to invest in the program, especially if you are looking to grow your finances for the long-run.
Here are five benefits you can get from saving under the Pag-IBIG MP2:
1. Above-market Dividend Rates.
One of the most compelling (if not the best) reasons to save under the MP2 savings program is its above-market annual dividend rates.
If you look at the program’s performance in the past, MP2 dividend rates have grown steadily, averaging at 6.96% from 2015 to 2017.
Meanwhile, for 2018, the Pag-IBIG Fund declared the MP2 dividend rate at 7.41% whereas the declared MP2 dividend rate in 2019 is 7.23%. Regardless of the outgoing rate, one thing’s for sure: it’s much, much higher than what your regular savings account can offer. But this is not to say that you need to put all your savings into the program although that is a strategy you can make based on your financial goals, as this is completely optional and serves as an adjunct to other investments that you may have with your bank and/or other insurance companies.
2. Easy, affordable, and flexible way to save.
Another great thing about the MP2 program is that you only need to save at least Php 500 as an initial deposit and as a monthly deposit should you decide to remit every month thereafter.
This makes saving into the program exceptionally light and convenient, especially for low-income earners.
Moreover, the MP2 offers flexibility on how often you want to save.
For example, you can choose to save every month if you’re on a tight budget. Alternatively, you can deposit a higher amount in a lump sum into your MP2 account, so you don’t have to remit monthly for your convenience (and nowadays, safety as well).
Again, this would all boil down to your financial capacity and preferences in terms of setting aside funds for your MP2 savings. Whatever is convenient for you, then go for it! The important thing here is that you know that you have options.
Furthermore, you have the option to receive your dividend earnings either via annual payout or compounded savings.
Choosing the dividend via annual payout, you will be credited with your earnings every year to your enrolled bank account with Pag-IBIG. But with compounded earnings, you’ll have to wait until the five-year maturity period before you can receive all your dividend earnings.
As you would expect, the compounded earnings will be much higher than the annual payout. Also, getting the annual payout would be counter-effective to the benefits of the program because for a minimum period of 5 years, the dividend rates could go higher than the previous year and that is something you want to maximize. And if you have bigger funds in your MP2 savings account, then that will lead to bigger earning off the fund’s interest for that year. So, think about this when you’re choosing your preferred mode of earnings.
It’s best to set it for the minimum period of 5 years, then consider putting it again into the fund for another 5 years and you’ll get much higher earnings off your regular monthly savings of at least Php 500.
3. Government-guaranteed and tax-free earnings.
If you think the higher earnings aren’t enough to join the program then you should know that unlike other investment vehicles, there’s no risk of losing your savings under MP2 because they’re fully guaranteed by the government.
However, as you know, the dividend rates change per year, depending on the HDMF’s financial performance.
The worst-case scenario would be getting back only your principal (the actual amount saved) without a profit, according to Pag-IBIG Fund President and CEO Acmad Rizaldy Moti. But housing and earnings off interest from loans are something that are not bound to go down at least anytime soon. So, you know your savings are in good hands.
4. Short-term to medium-term investment.
As mentioned earlier, with MP2 you have decent options. The MP2 program allows you to access your funds more quickly (with a five-year maturity period) than the regular Pag-IBIG savings program and other long-term investment vehicles (with maturity periods ranging from 10 to 20 years). This means the Pag-IBIG Fund will hold your MP2 savings for five years. After that period, you can withdraw all your savings or let it keep earning dividends for another two years.
You can also get earnings off your savings annually, depending on the projected need that you may have for your money.
5. You can save as much as you want.
And finally, you should know that there is no limit on the amount that you can save on the MP2. So you can start putting in the minimum amount at Php 500, then go higher as your capacity allows you, to maximize the earnings you get from the interest rates offered by the program.
Moreover, it’s important to note that there’s no penalty for no deposit. The Php 500 minimum deposit mentioned here only applies if you decide to remit during any particular month. So you basically have three options when determining how much you can save per month: 0, Php 500, or any higher amount.
And since there’s no penalty for no deposit, you can save anytime you want, whether it’s monthly, twice a month, quarterly, or once by paying a one-time lump-sum deposit. How convenient, right?
That said, you can also deposit as high as 1 million pesos. However, for this to be accepted, you will need to issue a personal check or manager’s check, though, for any amount higher than Php 500,000.
Furthermore, you can also enroll and maintain as many MP2 savings accounts as you want. This feature is great for meeting various financial goals. For example, you can have an MP2 account for starting a small business, another account for funding your child’s college education, and so on. So, make sure to think about it, especially when you have the funds. Yes, we’re looking at you, our OFW kabayan!
How to Enroll in the MP2 Program
There are two ways you can enroll in the MP2 program: (1) applying directly at any Pag-IBIG office or (2) through the online MP2 enrollment system. Below are the guidelines you need to follow when enrolling through either of the two:
Option 1: Walk-in MP2 Enrollment at any Pag-IBIG Branch
Step 1: Fill out the Modified Pag-IBIG II Enrollment Form available at your preferred Pag-IBIG branch.
Step 2: After encoding your information, the officer will issue an account number for your MP2 account. You will use this number to remit your savings.
Step 3: Since you’re already on-site, you can pay your first monthly savings right away. Just inform the officer and you’ll be given a queue number for the payment.
Step 4: Once your number is called, proceed to the cashier with your payment (the amount indicated on your MP2 enrollment form) and once the transaction has been processed, collect your official receipt.
Option 2: Online MP2 Enrollment
Step 1: Visit the Modified Pag-IBIG 2 Enrollment System.
Step 2: Enter your Pag-IBIG MID number, surname, first name, and birthdate in MM/DD/YYYY format. Then enter the code as it appears on your screen. Click “Submit“.
Step 3: Fill out the online form completely on the next page. The fields for Pag-IBIG MID no., Name, Date of Birth, Present Home Address, and E-mail Address are already pre-filled, so you may skip these. Make sure to enter your Monthly Income and Desired Monthly Contributions as these are important information needed by the system to process your account/s.
Step 4: Read the terms and conditions at the bottom of the form and once you’re done, enter the code in the blank field beside it. Then, click “Submit My Application“.
Step 5: A new page will pop up confirming your successful MP2 enrollment. Take note of the MP2 account number on the upper right corner. This is your account number which you will use to access your account online or when transacting in any Pag-IBIG branch.
Step 6: Read the terms and conditions. Write your name, the date, and sign at the bottom of the page. Once you’re done, click the link at the bottommost part of the page to print your MP2 enrollment form. You may save it first as a PDF file for printing later. If you’re an employee, you may print an extra copy to submit to your HR staff or employer, so you can remit your MP2 savings via salary deduction.
Step 7: (Optional) Repeat steps 1-6 if you want to open another MP2 account.
Step 8: Visit the nearest Pag-IBIG office and submit the printed copy of your MP2 enrollment form/s.
Step 9: Once you’re at the Pag-IBIG branch, you may inform the Pag-IBIG officer if you want to pay your first monthly MP2 savings right away. You’ll be given a queue number for the payment.
Step 10: Once your number is called, proceed to the cashier with your payment (the amount indicated on your MP2 enrollment form) and once the transaction has been processed, collect your official receipt.
Frequently Asked Questions
Below are some frequently asked questions and answers about the MP2 program by Pag-IBIG Fund.
1. How can I pay my Pag-IBIG MP2 savings?
There are several ways on how you can pay your Pag-IBIG contributions and MP2 savings. You can choose from any of these methods:
– Virtual Pag-IBIG
– Payment at the Pag-IBIG Branch
– Via Payment Centers (Bayad Center, MLhuiller, or any SM Business Centers and Bills Payment counters at Savemore and SM Hypermarket)
– Credit Card
2. Which is better: increase my regular Pag-IBIG contributions or save my money under MP2?
– Depending on what you wish to achieve, you can focus on either of the two.
If you want to steadily grow your savings over time, the better option would be the MP2 savings program. However, if you’re planning to get a Pag-IBIG housing loan, you’re better off upgrading your monthly contribution. Paying higher monthly contributions will help you qualify for a higher loan amount.
But if you have both goals in mind and if you can afford to save more, then it’s best to increase your contribution and save under the MP2 at the same time.
3. Is it better to cash out Pag-IBIG MP2 dividends every year or keep them invested for the next 5 years?
The right MP2 dividend payout strategy depends on your financial goals. Each option has its benefits that help meet certain goals.
The annual dividend payout option results in a lower total dividend and is perfect for people who need regular income to cover an annual expense, such as family trips, birthdays, and anniversaries.
This also works best for retirees who need to preserve the value of their money while receiving an extra income each year as a supplement to their retirement fund.
Tip: You need to be investing large amounts to reap the benefits of annual dividend payouts.
On the other hand, the compounded savings option, which has a 5-year maturity period is worth the wait as it lets you take advantage of the power of compounded interest.
You can use this option to save up for medium-term goals such as:
- your dream wedding
- capital for business
- downpayment for a vehicle
- college education fund
- an expensive foreign trip
- When can I withdraw my MP2 savings?
You can withdraw your MP2 savings through either of these two options:
a) After the five-year maturity period.
Once your MP2 savings have reached its maturity period, you can withdraw your earnings in full. If you still want to continue saving under MP2, you need to withdraw your savings and apply for a new account.
However, if you don’t withdraw after the maturity period, your money will continue to earn annual dividends based on the rates for the regular Pag-IBIG savings program for another two years. Beyond this period, your savings will no longer earn dividends and should be claimed immediately.
b) Pre-termination of savings.
There are certain conditions under which an account holder can pre-terminate and fully withdraw their MP2 savings before the five-year maturity period. These circumstances include:
- Retirement (except for pensioners)
- Total disability or insanity
- Separation from work due to health reasons
- Critical illness/Death of the member or an immediate family member
- Permanent departure from the Philippines
- Unemployment due to company closure or layoff
- Repatriation of an OFW member from his/her host country
How can I claim my MP2 savings?
Once your MP2 account reaches its maturity period, you’ll receive a notification letter from Pag-IBIG with instructions on how to claim your savings.
The Pag-IBIG Fund releases the MP2 earnings (dividend + cumulative savings) through check only.
Here are the steps to claiming your MP2 savings:
1. Within the month of your account’s maturity, visit any Pag-IBIG office to file for a claim. Bring two valid IDs.
2. After you’ve filed a claim at the Pag-IBIG branch, wait for a confirmation message from the Pag-IBIG Fund notifying you that your check is ready for pickup.
3. Go back to the Pag-IBIG branch to claim your check. Present two valid IDs to confirm your identity.
4. (Optional) If you don’t plan on spending your MP2 earnings within the next five years, you can re-apply for a new MP2 account and make a one-time payment with the amount you received.
4. How can I check or monitor my Pag-IBIG MP2 contributions?
As an active member, you need to regularly check that your monthly contributions are actually remitted to the HDMF as this will tell you the amount of savings you have in the fund and help you decide what to do with the amount that you’re setting aside for future use.
You can check your MP2 contributions through any of the following methods:
1. Virtual Pag-IBIG.
2. Pag-IBIG Fund Hotline.
3. Email Inquiry.
4. Pag-IBIG Fund Facebook Page.
5. Personal Inquiry at a Pag-IBIG branch.
6. OFW Member’s Contribution Verification.
ALSO READ: How to Check your Pag-IBIG Contributions
5. How can I open a Pag IBIG MP2 account if I’m an OFW working/living abroad?
OFWs can enroll in the MP2 savings program if they meet the qualifications mentioned earlier in this guide. They can do so by going through the regular online application process for the Pag-IBIG MP2 account.
After you have opened an account online using this form, you can ask your family members from the Philippines to pay your contributions at any Pag-IBIG branch. Alternatively, you can also pay your dues via any of the following Overseas Remittance Partners:
- Asia United Bank (AUB)
- I-Express Remit Mo Sa Pag-IBIG
- I-Remit Ventaja (including PayPilipinas)
- I-Text Mo Sa Pag-IBIG
- Philippine National Bank (PNB).
Important: Remember to use your MP2 account number for this transaction.
6. What is the best and cheapest way to remit/send money to your Pag-IBIG MP2 account?
As you know by now, there are several options to pay for your Pag-IBIG contributions. However, the best option is one that allows you to pay for your MP2 contributions the most convenient and cheapest way possible.
However, if you want a hassle-free way to pay your MP2 contributions, you may use the new Virtual Pag-IBIG facility. Use this payment channel if you’re remitting minimal savings like Php 500 to Php 1,000 (for a minimal convenience fee).
7. How can I pay my Pag-IBIG MP2 as an OFW Abroad?
For Overseas Filipino Workers, you may choose to pay the Pag-IBIG MP2 via the Virtual Pag-IBIG payment option online. However, there is a convenience fee of 1.75 percent depending on the amount. Personally, we would advise this as your payment method if you pay in small amounts. However, if you have time to make a one-time payment, we suggest you do that when you go back to the Philippines and pay over the counter at the Pag-IBIG office or via Bayad Centers. Otherwise, if you pay a one-time big time amount online, you will also pay a hefty amount as convenience fee.
Have you enrolled in the MP2 Savings Program yet? If not, what’s holding you back? There are several benefits you can get from this program as mentioned earlier in this post. If you want to maximize your savings in a fixed amount of time, consider enrolling in the MP2 savings program and let us know what you plan to use your earnings for in the future by leaving a comment in the section below!