Saving Money with Modified Pag-ibig II — Higher Earnings, Government-Guaranteed

Updated January 11, 2013
Puede mo nang iwidro ang total Pag-ibig 2 savings mo earlier than your maturity date.

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You want to save and grow your money? Modified Pag-ibig II (MP2) is a great savings plan. It has advantages over regular savings accounts, time deposits, or pre-need plans.

pag-ibig-II-save-money

What are the advantages of Modified Pag-ibig II?

1.  Guaranteed by the Philippine government.

Hindi nawawala parang bula, kagaya ng nangyari sa maraming pre-need firms na mismanaged by families na hindi na naawa sa mga planholders nila.

2.  The interest rate is much higher.

As of April 2010, the annual interest rate for Modified Pag-ibig II was 5.5%, walang tax, and much higher than savings account rates na usually ay between 0.5% to 1.75% lang. Bukod sa mababa na ang interest ng savings account, mababawasan pa ng withholding tax.

The Pag-ibig board can also declare an interest rate of more than 5.5%.

Sa time deposits naman, rates range from only 1.75% for deposits of at least 10,000 pesos to 2.75% for at least 5 million pesos.
Merong 5% na interest rate, pero ito ay ibinibigay sa mga at least 1 million pesos na hindi gagalawin for 5 years.

Isa pa, sa savings account, instead na saving money, ang ilan ay nalulugi pa, kasi madalas nababawasan ang savings dahil nagwi-widro sa ATM ng ibang bank at hindi name-maintain ang required balance.

The interest rate can go up, if the Pag-ibig board finds time to feel more generous dahil lumaki ang kita ng Pag-ibig.

Yong recent Pag-ibig table of expected earnings, 6% ang ginamit nila na interest rate:

Monthly Hulog Total Ipon After 5 Years (at 6%)
500 pesos 34,922 pesos
1,000 69,844
1,500 104,765
2,000 139,687
5,000 349,218

3.  Tax-free ang interest earnings ng MP2.  Walang bawas.

Ang time deposit, merong 20% withholding tax sa interest income, except lang sa mga 5-year tax-free time deposits. Ang savings account, meron ding 20% withholding tax sa konting na na-earn na interest.

4.  Low monthly minimum savings amount, which is 500 pesos per month. Puede mong dagdagan.

5.  Your savings are still yours, even if you’re unable to continue contributing to the program.
Sa pre-need, mawawala ang 50k, 100k, 150k mo kung hindi mo naituloy kahit valid ang dahilan, kasi pinirmahan mo yong contract na ganon.

6.  You CANNOT withdraw your Pag-ibig savings anytime. Maganda ito, in the sense, na hindi mo siya magagasto sa kung anu-ano lang. Hindi mo rin siya puedeng iwidro at ipahiram sa nakikiusap.  “Ay sori talaga, nasa Pag-ibig kasi savings namin eh, hindi puede iwidro.”

Update as of January 2013: Naglabas ng bagong circular ang Pag-ibig at sinabing meron ka nang option to withdraw your Pag-ibig 2 savings earlier than your maturity date. Palagay ko, maraming OFWs ang nakiusap na lagyan ng withdrawal flexibility itong savings program para sa mga OFWs na unexpectedly biglang nawawalan ng contract at nangangailangan ng pera.

Puede ring tinutulad nila yong SSS Flexi-Fund, which can be withdrawn before maturity date, but with earnings deduction kapag withdrawn within a year.

7. You CANNOT borrow it.  Hindi puedeng mag-loan dito. Yong sa mandatory Pag-ibig I, doon ka mag-loan.  Advantage itong hindi mo ma-loan, kasi hindi mo magagalaw.

8. Available for withdrawal after 5 years. Oh ayan, puede nang iwidro! Pang-tuition, o pang-down sa house and lot, or pambili na ng bahay.

Kung ayaw mo pa, at gusto mo pang dagdagan, you can keep on saving money by renewing it for another 5 years.

Who can save with Modified Pag-ibig II?

Anyone who is already a member of Pag-ibig I. Dapat mag-member muna sa Pag-ibig I kasi ito ay mandatory. Ang Pag-ibig II ay voluntary. Puede sa OFW, sa seaman, at sa employee, self-employed or business owner dito.

How do we start saving with Pag-ibig II?

Visit any Pag-ibig branch with your IDs and apply for Modified Pag-ibig II membership.  Fill out a Modified Pag-ibig II Registration Form (MP2RF).  You can start with 500 pesos, or go ahead with 5,000 pesos.

Updates as of January 11, 2013:

–  Meron ka nang option to withdraw your Pag-ibig 2 savings earlier than your maturity date.
– Kapag wala kang isinulat na term ng savings mo, ang default term ay 5 years.
– Kapag sinulatan ka ng Pag-ibig notifying you na nag-mature na ang Pag-ibig 2 savings mo at dapat mo nang kunin or i-renew pero hindi mo kinuha o hindi mo ni-renew, ang magiging interest rate ng savings mo ay yong interest rate ng Pag-ibig 1, which is a bit lower.

Saving Money with Modified Pag-ibig II

158 Comments

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  1. Hi ms. Nora, have you sent your contact # to my email address? what’s the subject? I can’t see it in my inbox. thank u

  2. Gud morning how can I pay pag-ibig fund? I’ve only been here in hongkong for 1 month and I don’t have my membership number. I know that it’s mandatory for ofws to be pag ibig members.

  3. Hi ms nora. Inquire if I can file a housing loan to buy the apartment unit that we are renting. Thanks and more power.

  4. Hi Froi, yes, you can apply for a loan if you’re a Pag-ibig member. Ask also the apartment owner if he’s willing to give you a copy of the property title so you can show it to Pag-ibig for initial application.

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