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

124 Comments

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  1. Good pm! Im a govt employee and an active P1 member. I want to enroll in MP2 but I don’t have a transaction card with security code required in registering to P2. what should i do? If I become a P2 member, can i pay through payroll or should i pay at the branch? Thanks!

  2. Hi Erick, click the “No Pag-ibig MID No.” and you just need to enter your transaction no. You can request your HR/accounting to deduct and remit your MP2 contributions. If they refuse, which is their right since MP2 is optional, then you pay at your branch. If your SIM is Globe, you can get a GCash card and then pay through GCash.

  3. hi maam! I would like to ask if my child can submit in pinas my Mp2 registration form together with my scanned IDs, not original IDs. And why is the website no longer open for pag ibig I contribution check. I see only the welcome message for my account and one more thing I tried to update my members data at e services but it does not update.

  4. Hi dahlia, you can register online in MP2. Click E-Services, then MP2 Enrollment System (scroll down). If you do not have a security code, click “No Pag-ibig MID No.” even if you have a Pag-ibig MID No. You will use your tracking no.
    About not being able to update, try again some time, as they’re currently enhancing their website.

  5. Upon application to MP2, is payment of 500.00 required already?
    For employed individuals, is their a particular deadline for remitting the said amount? Thanks.

  6. Thanks Nora, so let’s say this year 5.4% is the dividend declared by pag-ibig board and then next year 5.1% and on my third year 5.5%, how about in my 5th yr, which of these dividend rates is used? if possible, can we keep track of how our money grow at least quarterly or yearly? thanks

  7. Hi ann, since MP2 is voluntary, I think you’re not required to pay immediately. If you pay through your employer, your monthly deadline is the same as that for the mandatory savings. Pag-ibig payment deadlines.
    If you’ll pay directly to Pag-ibig, your deadline is the last day of the month.

  8. Hi Mel, thanks too. I’ve observed that Pag-ibig has been declaring the dividend rate every April or May of the following year. For example, in April 2013, Pag-ibig declared the dividend rate for 2012 as 4.17% and last April, they declared the dividend rate for 2013 as 4.08%. I assume that if you file your claim before April or May, at a time when the dividend rate is not yet declared, either they’re going to delay processing after April or May or might use the most recent declared rate (and this is only my assumption :) )
    About keeping track, you can visit your Pag-ibig branch and ask for a copy of your total accumulated savings (TAV).

  9. Please give me a computation mam/sir for an investment of 500,000php. How much interest will my money earn after 5 years? I’m not sure if my computation 5.5% =137500Php is correct. I need your urgent reply.

  10. Hi Joan, Pag-ibig 2 is always open to Pag-ibig 1 members. If you’re already a Pag-ibig 1 member, you can go to pagibigfund.gov.ph and register with MP2. After getting your MP2 no., you can start contributing.

  11. Hi Miss Nora, can I make payments two (2) times in a month? For example, I’ll pay 1000 in the first week of november, then add 500 pesos at the end of the said month. Second question, is it allowed if my monthly payment amounts are not consistent? For example, I pay 1500 pesos in November then at the month of December I pay 1000.

  12. Hi ms. nora, so if in case my default term is 5 years, do I need to file a claim every April or May except on the 5th year? Which rate would be used? Dividend rate before claiming or most recent for the 5 years? thanks

  13. Hi, tanong lang.
    Kapag hindi kinuha o hindi mo ni-renew, ang magiging interest rate ng savings ay yong interest rate ng Pag-ibig 1, which is a bit lower.
    Paano naman kung nakaligtaan noong magmature after 5 yrs kaya di mo kinuha then on the 6th year tsaka ka nagkaroon ng pagkakataon na iwidro, pwede n aagad ma widro? OR baka naman gawin nilang as if part na ng Pag IBIG 1 pwede mo lang ma widro pagka retirement age na or 240 contributions ka na, WAG NAMAN SANA!

  14. Hi Mel, yes, you file at the end of the 5-year period. The rate is applied yearly and dividends added yearly. It’s more likely that a certain year’s interest rate will be different from another year’s interest rate.

  15. Dear ms. may I ask if the dividends for mp2 are applied yearly or at one time for 5 years. This year 2014 for the months of june up to this month 7 months, I wasn’t able to pay. When is the deadline so I can get the dividend rate for 2014, thank you.

  16. Ms nora is the dividend rate for mp2 applied yearly or when is it applied? every last working day of december or certain month? What month?

  17. Hi john, based on the TAV printout I got from Pag-ibig, the dividend rate is applied every year, every Dec 31. So you can pay Pag-ibig before Dec 31. Pay earlier so your payment will be posted before Dec. 31.

  18. Hi mis Nora, what is pag-ibig 1 membership? is this the regular membership when you are employed? because i’m planning to enroll in mp2. Thanks!

  19. Hi Ruel, yes, you’re correct. Pag-ibig 1 is the one that employees/employers are mandated to pay. It’s good you’re planning to save with MP2 too. Happy saving!

  20. I am a government employee. Last year, I requested our agency to increase my Pag-Ibig contribution to Php1,500. Since then the amount of Php1.500 is being deducted from my salary monthly. I now wish to avail myself of MPII. I want to seek clarification whether my increased Pag-Ibig contribution of Php1,500 is already credited as MP II MP I?. I have not yet registered with MP II ay the time I requested our agency to increase my monthly Pag-Ibig contribution. Thanks.

  21. hi ms nora, the link to “no pag ibig mid number” when I tried to register in mp2 is not working. Is it really possible to register online or do I need to pag ibig office? :( thanks

  22. Hi grace, it worked when I clicked it. Some pages don’t work with smartphones, if you’re using a smartphone. Yes, if you can, you can go to your Pag-ibig branch, so you can start paying.

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