How to Invest in Pag-IBIG MP2 Program: An Ultimate Guide

Last Updated on 09/14/2020 by FilipiKnowOpens in a new tab.

The Modified Pag-IBIG II or 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.

The HMDF invests the funds collected from the Pag-IBIG MP2 mostly in its housing loan programOpens in a new tab., as well as its short-term loan programs. Funds grow through interest payments from borrowers. The rest is invested in corporate bonds, time deposits, and government securities.

Whether you’re a first-time investor or an experienced one who wants to add Pag-IBIG MP2 investment to your portfolio, this guide should get you started.

READ: Pag-IBIG Contribution Table (with Detailed Computations and Explanations)Opens in a new tab.

 

Table of Contents

Who can save under MP2?

You can open a Pag-IBIG MP2 account if you belong to any of these groups:

  • All active Pag-IBIG members, regardless of monthly income.
  • Former members or pensioners, regardless of age, who have paid at least 24 monthly contributions before retirement.

If you’re not a Pag-IBIG member yet, you must register firstOpens in a new tab. and pay your monthly contributionsOpens in a new tab. to be considered an official member.

If you’re a former member who’s qualified for the MP2 program, you can simply proceed with your MP2 enrollment.

 

Why should you open a Pag IBIG MP2 account?

MP2 enrollment is not required for Pag-IBIG members, but doing so will be beneficial for you in the long run.

Here are five good reasons to start saving under the Pag-IBIG MP2:

1. Above-market dividend rates.

The most compelling reason to save under MP2 is its above-market annual dividend rates.

In the past few years, MP2 dividend rates have grown steadily, averaging at 6.96% from 2015 to 2017.

For 2018, the Pag-IBIG Fund declared the MP2 dividend rate at 7.41%. Meanwhile, the declared MP2 dividend rate in 2019 is 7.23%.

pag ibig mp2 dividend rate

Simply put, the MP2 is more profitable than the regular Pag-IBIG savings program. MP2 dividend rates even surpass the average interest rates of investment products from commercial banks in the PhilippinesOpens in a new tab..

With the HDMF’s record-breaking financial performance year after year, it’s expected to maintain the MP2 program’s remarkable dividend rates.

2. An easy, affordable, and flexible way to save.

Under the MP2, you need to save only at least Php 500 as an initial deposit and as a monthly deposit should you decide to remit every month thereafter.

It makes saving money easy on the budget, especially for low-income earners.

The MP2 also offers flexibility on how often you want to save. 

You can choose to save every month if your budget is tight. Alternatively, you can deposit a higher amount in a lump sum into your MP2 account, so you don’t have to remit monthly. For example, you can pay Php 30,000 as a one-time remittance instead of paying Php 500 every month for five years.

READ: Best Way to Invest in Pag-IBIG MP2: Monthly, Annual, or Lump Sum (One-Time) Payment?Opens in a new tab.

You also have the option to receive your dividend earnings through either annual payout or compounded savings. 

If you choose to receive your dividend via annual payout, it will be credited 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.

3. Government-guaranteed and tax-free earnings.

Unlike other investment vehicles, there’s no risk of losing your savings under MP2 because they’re fully guaranteed by the government. 

However, 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 Moti1.

4. Short-term to medium-term investment.

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.

5. Save as much as you want.

There’s no limit on the amount you can save under MP2.

Just remember that the minimum amount you can save is Php 500. You may increase this during the next few months (e.g., Month 1: Php 500; Month 2: Php 5,000; Month 3: Php 10,000; and so forth).

However, it should be noted 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.

Because 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.

You may also deposit a million pesos! You’ll have to issue a personal check or manager’s check, though, if you’ll save Php 500,000 or higher.

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 businessOpens in a new tab., another account for funding your child’s college education, and so on.

 

What is an MP2 dividend and how is it computed?

A dividend is an amount that the Pag-IBIG Fund pays out to its members who invest in the MP2 program.

Dividend earnings are tax-free, which means you’ll receive the full amount without having to pay the 20% final withholding taxOpens in a new tab..

To compute your MP2 dividend, multiply the dividend rate for the applicable year by your average monthly balance.

Here’s the formula for MP2 dividend computation:

Dividend = Dividend rate x Average monthly balance

Calculating the MP2 dividend is not as simple as it looks, though.

Before proceeding with the computation, it’s important to understand first what the dividend rate and the average monthly balance mean.

The dividend rate is the interest rate based on the Pag-IBIG Fund’s annual net income. The Fund usually announces the dividend rate for a particular year in the first or second quarter of the following year through a news release on the Pag-IBIG website.

For instance, the dividend rate for 2018 is 7.41%, which the Pag-IBIG Fund declared in April 2019.

Meanwhile, the average monthly balance refers to the average of the MP2 savings you’ve accumulated by the year-end. To determine your average monthly balance, get your total cumulative savings for the year and then divide it by 12 (months).

For easier calculation, record your monthly MP2 savings into an Excel file or Google Spreadsheet and then get their average.

Let’s say you’re saving Php 500 per month from January to December 2020. Plotted on a spreadsheet, your cumulative savings look like this:

pag ibig mp2 dividend computation

The total cumulative savings for 2020 is Php 39,000. Divide that by 12, and you’ll get Php 3,250. That’s your average monthly balance.

An easier way to compute the average monthly balance is to use the AVERAGE function in Excel or Google Spreadsheet, which yields the same amount: Php 3,250.

At this point, you can already compute the dividend for the year 2020 based on a dividend rate of 7.5% (the rate the Pag-IBIG Fund always uses in its sample dividend computations).

0.075 (dividend rate) x Php 3,250 (average monthly balance) = Php 243.75 (dividend for 2020)

To compute your dividends for the next four years, simply repeat all the steps above.

If you avail of the compounded savings option, don’t forget to add the dividend amount from the previous year to the cumulative savings in January of the following year.

But if you avail of the annual dividend payout option, don’t add the dividend amount from the previous year to the current year because it’s paid out to you every year.

For your quick reference, the table below from the Pag-IBIG Fund shows the annual dividend payout over a five-year period if you pay Php 500 monthly to your MP2 account (based on a 7.5% dividend rate).

Note: The first line was the one we used as an example for the detailed computation above.

Month Covered
Monthly Savings (MS)
Accumulated MS per year
Cumulative Savings
Annual Dividend Payout
Total Accumulated Value (TAV)
Jan-Dec 2020
500
6,000
6,000
243.75
6,000
Jan-Dec 2021
500
6,000
12,000
693.75
12,000
Jan-Dec 2022
500
6,000
18,000
1,143.75
18,000
Jan-Dec 2023
500
6,000
24,000
1,593.75
24,000
Jan-Dec 2024
500
6,000
30,000
2,043.75
30,000
Total
30,000
5,718.75
30,000

The second table, on the other hand, shows how much you can earn if you choose to keep your dividends in your account within the same period and use the power of compound interest (again, based on a 7.5% dividend rate).

Month Covered
Monthly Savings (MS)
Accumulated MS per year
Cumulative Savings
Annual Dividend Payout
Total Accumulated Value (TAV)
Jan-Dec 2020
500
6,000
6,000
243.75
6,243.75
Jan-Dec 2021
500
6,000
12,243.75
712.03
12,955.78
Jan-Dec 2022
500
6,000
18,955.78
1,215.43
20,171.21
Jan-Dec 2023
500
6,000
26,171.21
1,756.59
27,927.81
Jan-Dec 2024
500
6,000
33,927.81
2,338.34
36,266.14
Total
30,000
6,266.14
36,266.14
 

Why is the dividend rate of Pag-IBIG MP2 so high?

Historically, MP2 dividend rates have been on an upward trend. Since 2016 up to present, the rates have never gone down below 7%.

pag ibig mp2 dividend rates

While these figures seem too good to be true, there’s no reason to worry or doubt as to why the Pag-IBIG MP2 dividend rates are “too high.”

The Pag-IBIG Fund’s strong financial performance over the years has pushed up the MP2 rates. The government agency attributes its solid financial standing to its operational efficiencies and strong housing loan payment collections.

Because the Pag-IBIG Fund invests 70% of its investible funds in its housing loan programOpens in a new tab., people investing in MP2 earn from the interest payments of housing loan borrowers.

Also, MP2 dividends come from at least 70% of the Pag-IBIG Fund’s annual net income, which has seen steady growth for the past six years. In 2019, the Fund recorded a net income of Php 34.37 billion—its highest ever2.

An impressive annual financial performance translates to higher dividend earnings for MP2 accountholders.

 

How to enroll in the MP2 program.

There are two ways to open an MP2 savings account: applying directly at any Pag-IBIG office or using the online MP2 Enrollment System.

Option 1: Walk-in MP2 registration at a Pag-IBIG branch.

  1. Submit a completed Modified Pag-IBIG II Enrollment FormOpens in a new tab. at the nearest Pag-IBIG branch.
  2. After encoding your information, the officer will issue an account number for each of your MP2 accounts. You’ll use the MP2 account number/s to remit your savings.
  3. If you want to pay your first monthly MP2 savings right away, inform the Pag-IBIG officer. You’ll be given a queue number for the payment.
  4. When your number is called, proceed to the cashier and pay the amount you indicated on your MP2 enrollment form. Receive your official receipt.

Option 2: Online MP2 enrollment.

Online registration for MP2 is quicker than enrolling manually, as you won’t have to fill out the form at the Pag-IBIG office. However, you’ll still need to go to the nearest branch to complete your MP2 enrollment.

Here’s how to enroll in the MP2 program online:

  1. Go to the Modified Pag-IBIG 2 Enrollment SystemOpens in a new tab..
  2. Type your Pag-IBIG MID numberOpens in a new tab., surname, first name, and birthdate in MM/DD/YYYY format. Then enter the code as it appears on your screen. Click the Submit button.
pag ibig mp2 3
  1. Fill out the online form. The fields for Pag-IBIG MID no., Name, Date of Birth, Present Home Address, and E-mail Address are already pre-filled, so no need to fill them out (On the screenshot below, the personal details are concealed for privacy purposes).  Make sure to enter your Monthly Income and Desired Monthly Contribution—these are required fields.
pag ibig mp2 4
  1. Read the terms and conditions below the online enrollment form. Then enter the code you see. Finally, click the Submit My Application button.
pag ibig mp2 5
  1. A page confirming your successful MP2 enrollment will appear. Take note of your MP2 account number on the upper right corner. The page also contains your accomplished enrollment form (Again, personal details are concealed on the screenshot below).
pag ibig mp2 6
  1. Read the terms and conditions. Write your name and sign at the bottom of the page. Write down the date as well.  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, print an additional copy and submit it to your HR staff or employer, so you can remit your MP2 savings via salary deduction.
pag ibig mp2 7
  1. Optional: If you want to open another MP2 account, repeat steps 1 to 6.
  2. Visit the nearest Pag-IBIG office and submit the printed copy of your MP2 enrollment form/s.
  3. If you want to pay your first monthly MP2 savings right away, inform the Pag-IBIG officer. You’ll be given a queue number for the payment.
  4. When your number is called, proceed to the cashier and pay the amount you indicated on your MP2 enrollment form. Receive your official receipt.

Go back to the main article: How to Compute Your Pag-IBIG Contribution: A Complete Guide to Contribution Table and PaymentOpens in a new tab.

 

How to make the most out of your MP2 investment to achieve important life goals.

Here are the different ways to maximize your MP2 investment based on your goal.

1. For long-term investment (10+ years).

If you’re in your 20s or 30s, you have more than 10 years to invest your money for any long-term financial goal, like building your retirement fund or buying your dream home.

For this, your strategy should be growing your money over time. Here’s how to do it through Pag-IBIG MP2 savings:

  • Open an MP2 account with the compounded dividend option.
  • Make a one-time MP2 contribution (ideally not less than Php 30,000).
  • Withdraw your earnings at the end of the five-year maturity period.
  • Re-invest your earnings by opening a new MP2 accountOpens in a new tab..
  • Repeat the process for another five years and so on.
  • Withdraw your total cumulative savings and dividends when you’ve reached your target earnings.

2. For capital preservation.

If you’re in your retirement age (or approaching it), you can’t take investment risks anymore. So instead of investing in the long-term, your goal is to preserve your capital so that your money doesn’t lose its value to inflation.

Pag-IBIG MP2 can help you achieve that goal through the annual dividend payout option, which allows you to receive dividends per year while keeping the value of your investmentOpens in a new tab.. Here’s how to do it:

  • Open an MP2 account with the annual dividend payout option.
  • Make a one-time MP2 contribution (The higher the amount, the higher return you’ll get).
  • Receive your dividend every year through your Pag-IBIG Loyalty Card Plus or the bank account you registered in your MP2 account opening.
  • Withdraw your cumulative savings once your MP2 account reaches the five-year maturity period.
  • Re-invest your earnings by opening a new MP2 account.
  • Repeat the process for another five years and so on, as long as you need a steady stream of income.

3. For multiple medium-term investment goals.

The Pag-IBIG Fund allows opening as many MP2 accounts as possible. Take advantage of this feature if you have several goals to achieve for the next five years or so.

The optimal number of accounts will depend on the expenses you’re preparing for. Each account will be created for a specific purpose, such as travel fund, tuition fund, wedding fund, home/vehicle purchase, etc.

Here’s how to maximize your MP2 investment for your medium-term goals:

  • Open two or more MP2 accounts at the same time with the compounded dividend option. If your budget is limited, you can open one account per year for the next two years or more.
  • Make a one-time contribution per MP2 account.
  • Withdraw your earnings upon maturity of each account.
 

Tips and Warnings.

  • If you choose to save monthly, the minimum amount you can remit each month is Php 500. Since there’s no limit to how much you can save, you can remit anything higher than Php 500 initially and during the succeeding months. For example, you can save Php 500 during the first month, remit Php 20,000 during the next, Php 10,000 in the third month, and so forth.
  • Payments don’t need to be consistent. You can save once a month, twice a month, every quarter, or just once through a lump-sum deposit.
  • You can even skip a payment without incurring any penalty. Just to be clear, the Php 500 mentioned previously is the minimum amount you can contribute should you decide to remit during any particular month. But in case you forget to remit or you have nothing to remit at all, rest assured your account will remain active. In other words, you have three options when deciding how much to remit to your MP2 account per month: 0, Php 500, or higher. 
  • The 5-year lock-in period starts from the time you make your first deposit, not when you generated your Pag-IBIG MP2 number from the website.
  • Upon application, you can choose to receive either annual dividends or leave your savings untouched for the next 5 years so you can earn more though compounded savingsOpens in a new tab.. The annual dividends are paid out to members through the Pag-IBIG Loyalty Card Plus.
  • To quickly check whether your latest payment already reflects in your Pag-IBIG MP2 account, create a Virtual Pag-IBIG accountOpens in a new tab.Once you already have an account, follow the instructions hereOpens in a new tab. to view your updated record of contributions or MP2 deposit history. On average, it takes 3-5 days for the payment to finally reflect in your account.
  • If you’re paying through a third-party payment channel, always keep a proof of your transaction like the actual receipt or screenshot showing your payment has been received (if you’re using a mobile wallet like GCashOpens in a new tab.).
 

Frequently Asked Questions.

1. When should I pay my Pag-IBIG MP2 savings?Opens in a new tab.

2. What is the best way to invest in Pag-IBIG MP2? Is it through monthly, annual, or one-time savings?Opens in a new tab.

3. How can I pay my Pag-IBIG MP2 savings?Opens in a new tab.

4. Which is better: increase my regular Pag-IBIG contributions or save my money under MP2?Opens in a new tab.

5. Is it better to cash out Pag-IBIG MP2 dividends every year or keep them invested for the next 5 years?Opens in a new tab.

6. When can I withdraw my MP2 savings?Opens in a new tab.

7. How can I claim my MP2 savings?Opens in a new tab.

8. How can I check or monitor my Pag-IBIG MP2 contributions?Opens in a new tab.

9. Can I re-apply for a new MP2 Savings once my MP2 Savings matures?Opens in a new tab.

10. Where does Pag-IBIG invest my MP2 contributions?Opens in a new tab.

11. How can I open a Pag IBIG MP2 account if I’m an OFW working/living abroad?

12. What is the difference between Pag IBIG MP2 and SSS PESO Fund? Which one is a better government savings program?Opens in a new tab.

13. What is the best and cheapest way to remit/send money to your Pag-IBIG MP2 account?Opens in a new tab.

 

References.

  1. Takumi, R. (2017). Pag-IBIG offers members new modified-savings program. Retrieved 17 May 2020, from https://www.gmanetwork.com/news/money/personalfinance/620739/pag-ibig-offers-new-savings-program-at-higher-rate-than-regular-contributions/story/Opens in a new tab.
  2. Pag-IBIG Fund reports record income, loan releases in 2019. (2020). Retrieved 17 May 2020, from https://cnnphilippines.com/business/2020/2/7/Pag-IBIG-Fund-reports-record-income-loan-releases-in-2019.htmlOpens in a new tab.

Venus Zoleta

Venus Zoleta is an experienced writer and editor for over 10 years, covering topics on personal finance, travel, government services, and digital marketing. Her background is in journalism and corporate communications. In her early 20s, she started investing and purchased a home. Now, she advocates financial literacy for Filipinos and shares her knowledge online. When she's not working, Venus bonds with her pet cats and binges on Korean dramas and Pinoy rom-coms.

122 thoughts on “How to Invest in Pag-IBIG MP2 Program: An Ultimate Guide

  1. I have watched videos from other financial advisors. I thought an individual can only create 1 MP2 account?

    1. That’s incorrect. You can open multiple MP2 accounts. All the information here came from and have been verified by Pag IBIG and not just by some random “financial advisors”. The information about having multiple accounts can be found here: https://www.pagibigfund.gov.ph/FAQ_MP2.html#:~:text=You%20are%20allowed%20to%20open,Pag%2DIBIG%20Fund’s%20financial%20performance.

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  3. Hello pa clarify lang po sa dividend portion
    #1
    Formula: Dividend = dividend rate x average monthly balance
    Given: Dividend rate = 7.5%, Average monthly Balance = Php 3250
    Solution: Dividend = 0.075 x Php 3,250
    Dividend = Php 243.75 ?
    Question: So sa Php 39,000 (1 yr accumulated) is Php 243.75 lang ang na gain for 2020? Therefore 243.75/39000 = 0.625% lang? or kailangan pa i multiply ng 12 months so Php 243.75 x 12 months =
    Php 2,925?

    #2
    Sa next example niyo naman po.
    Given: Monthly = Php 500 ; Total accumulative = Php 6,000 ; Dividend rate = 7.5% ; Annual dividend payout = 243.75
    Nag try ako compute: 243.75/6000 = 4.06%? So if 7.5% dapat Php 450?

    Base sa #1 and #2

    Formula: Dividend = dividend rate x average monthly balance
    Given: Monthly = 500 ; Total accumulative = 6,000 ; Dividend rate = 7.5%
    Solution: Dividend = 0.075 x Php 500
    Dividend = Php 37.5

    Paki clarify lang po thanks.

    1. Referring to what’s Mr/Ms Krens is asking, computations for annual dividends that have 39,000 accumulated MS per year is 243.75. and on the next table, 6,000 accumulated MS per year, you also use 243.75 as annual dividends.
      Pls. clarify on that because I’m also confused with your computations.

      1. I already answered the question. They’re one and the same. We just tried to explain what’s on the table.

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  9. Hello, I just want to ask regarding Pag ibig MPll, I was registered already, and paid 1 month only way back year 2015, whst will I do, so that I can invest in MPII?

    1. You must be an active Pag-IBIG member who pays the regular contributions regularly. The list of qualifications is already discussed above (see “Who can save under MP2?”).

  10. Dating member ako ng Pag ibig nais ko po ituloy, ngayun sa ibang bansa ang trabaho ko, pano at ano ang gagawin ko.
    Salamat sa pagtugon.

    1. First, you need to reactivate your Pag-IBIG membership: https://filipiknow.net/reactivate-pag-ibig-membership/

      Once you’re regularly paying your regular contributions again, you can now enroll in Pag IBIG MP2: https://filipiknow.net/how-to-open-pag-ibig-mp2-for-ofw/

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