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

Updated April 1, 2015

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.

Your savings will not be lost. Your savings are guaranteed by the Philippine government.  Pag-ibig Fund will not vanish like the pre-need firms mismanaged by families who never returned what the planholders sacrificed to pay over many years.

2.  The interest rate is much higher.

In April 2010, the annual interest rate for Modified Pag-ibig II was 5.5% — much higher than savings account rates that are usually between 0.5% to 1.75%. MP2 earnings are not taxed. Interests on savings accounts are taxed.

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

If you look at time deposits, rates range from only 1.75% for deposits of at least 10,000 pesos to 2.75% for at least 5 million pesos.
There’s a 5% interest rate, but this is only given to time deposits of at least 1 million pesos and should not be withdrawn within 5 years.

Another thing, bank savings accounts are accessible — you can withdraw them anytime.

They also have maintaining balance requirements, and if you are not able to comply, instead of saving money,  you lose 300 pesos to 500 pesos or more for each month you fall below the maintaining balance.

The MP2 interest rate can go up, if the Pag-ibig board sees that Pag-ibig earned much more for a certain year.

Look at this Pag-ibig table of expected earnings; 6%  was used as annual interest rate:

 

Monthly Savings Total Savings 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.  Interest earnings for MP2 are tax-free.  No tax deductions.

For time deposits,  there’s a 20% withholding tax on the interest income, except for 5-year tax-free time deposit products. The same with savings accounts, there’s also 20% withholding tax on the few pesos earned as interest.

4.  Low monthly minimum savings amount, which is 500 pesos per month. Affordable.

You can increase your monthly MP2 savings anytime.

5.  All your savings are still yours, even if you missed paying for some months, or if you’re unable to continue contributing to the program.

If there are gaps in your contributions, you are not penalized. You get back all what you’ve saved, plus your dividend earnings.

With pre-need, your 50k, 100k, 150k savings or more are forfeited (mawawala sa yo parang bula) if you’re not able to complete your plan, even if your reason is valid. You signed the contract, and the forfeiture policy is in that contract. If you pre-terminate early, you get nothing back. If you pre-terminate after 3 or more years, you get only a little of what you’ve paid.

6.  You CANNOT withdraw your Pag-ibig savings anytime.  This is great, in the sense that you cannot just withdraw to buy a useless gadget on sale.  Your friend or relative cannot also force you to withdraw so they can borrow —  “Ay sori talaga, nasa Pag-ibig kasi savings namin eh, hindi puede iwidro.”

7. You CANNOT borrow it.  There’s no loan program for MP2 members.  The short-term loan program is only for the mandatory Pag-ibig I program.  Again this is good — your savings remain untouched.

8. Available for withdrawal after 5 years. Oh ayan, puede nang iwidro! For tuition, or for a house and lot downpayment, or outright property purchase, or business capital.

If you like to save more, you can keep on adding to your MP2 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.  You should first become a Pag-ibig I member, as Pag-ibig I is mandatory. Pag-ibig II is voluntary.  You can be an MP2 member whether you’re a land-based OFW, seaman, employee, self-employed or business owner.

How do we start saving with Pag-ibig II?

Apply for your MP2 account no. online at pagibigfund.gov.ph.

Or 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.

Note:

If you’ve reached your MP2’s 5-year term, and you want to renew it, contact Pag-ibig and renew it, otherwise, the interest rate for your MP2 savings will be the same as Pag-ibig 1, which is a bit lower than MP2.

Saving Money with Modified Pag-ibig II

190 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.

  5. Hi Francisco, try restarting your computer. Are you using a smartphone? Some commented here that they cannot enroll through smart phones, so use a desktop/laptop. Or maybe there’s a website glitch at that exact time you enrolled, so try again.

  6. Hello po. I would like to ask if i opt for MP2, is it additional to the 100 monthly contribution? Thank you.

  7. Hi Katrina, it’s your additional Pag-ibig savings, but MP2 is a separate program, and you need to get your separate MP2 account no. at pagibigfund.gov.ph. You’ll be the only one saving; your employer is not mandated to contribute. You’ll pay separately. Ask your employer if they can remit your payment for you, but if not, pay your MP2 by yourself.

  8. Hello ma’am, One more thing po. Do Pag IBig have an internet portal where we can check the loan payments we have made? Kasi last time na iverify ng HRD nmin there are gaps in my payment which is unacceptable because we remit every month.

    Thank you!

  9. Hi Ms. Nora, my question is do I have to inform my employer if I want to enroll in MP2? How/can we also check the contributions/payments that we made? Thank you

  10. Hi Louise, MP2 is voluntary, so you’re not obliged to inform your employer. Get your MP2 account no. at pagibigfund.gov.ph and make your first payment at your branch. For subsequent payments, you can pay at Bayad or SM center. But you can ask your HR if they are doing MP2 remittance as service to employees

  11. Thank you for the reply Ms. Nora. Also I want to ask if I can make a 3K or 4K monthly savings because I didn’t see that amount on the above table. Or yun lang po ba ang pwede iremit on what is indicated? Thank you

  12. Hi Ms. Nora,how is the process of registering to POP? Is this different to Pag-ibig 1 membership and MP2?How can OFW access for the registration? What is the benefit of registering to this PAg-ibig Overseas Program compared to regular Pag-ibig contribution and to MP2? What is the minimum and maximum contributions allowed? Please advise.
    Thank You!

  13. Hi JES, yes, POP is different. POP was the old program offered to OFWs in the past. I think they’re not offering this anymore, as there’s no more application form for this program. And it’s no longer mentioned in payment advisories. Apparently, they’re just completing the payoff for POP claims. They replaced this POP with the newer program MP2, which is now available also to local employees, and not only OFWs. You can have more than one MP2 accounts.

  14. Hi po Ms. Nora, can I remit my savings for one whole year in a single remittance? Or does it need to be sent monthly? Thanks marky

  15. A pleasant day to you Ms. Nora. I’m interested in applying for MP2 but I’m having a hard time enrolling online somehow I get stuck at some point. I just decided to enroll at my nearest branch (would it be better?). Just want to know what are the requirements/documents I have to bring to personally enroll at MP2. Also, do you need to enroll in MP2 online even if you want to register personally at the branch? Thanks for answering. God bless

  16. Hi Marky, yes, you can remit to your MP2 in a single remittance. The application of dividends is yearly, so what will be significant is the total balance at the end of the year.

  17. Hi Louise, yes, you can enroll at the nearest branch. I don’t know if it’s the same in all branches, but in the Makati branch, they let you enroll through their computers. It’s better in the sense that you can ask for assistance and you can make your first payment immediately after enrollment. If you’re already a Pag-ibig 1 member, then your IDs will be enough. Have also your Pag-ibig MID no. or transaction no.

  18. Good day! i have an active pagibig 1 and then i am paying online po for my mp2 since december 2014. I asked public affairs about my contributions, p1 is ok but my mp2 since december is not reflected. Is paying online ok for mp2 contributions? Yes i kept my receipts too, how come they are not able to show my online contributions?

  19. Hi Erlinda, I think the OFW contributions that can be verified online are P1 contributions only, as MP2 has another no., different from your P1 or MID no. Try entering your MP2 account no. if it works, and if not, you can email public affairs again and ask if MP2 payments by OFWs can be verified through their website.

  20. Hi good day po. Regarding mp2, can we save every month more than 5k? How do we pay online? Thank you!

  21. hi…is it possible if members of mp2 can advance their contribution like we say 300,000.00 enough for 5 five years?

  22. Hi zakkiya, it’s SSS Flexi-Fund (available only to OFWs) which has this one-time contribution payment program – it can be withdrawn after 3 to 20 years. About MP2, I’m not sure, so I have to call Pag-ibig first. Will be back to answer.

  23. Hi Gee, Pag-ibig did not set a maximum amount, although the highest amount in the example on its website is 5,000 pesos. But I think you can save higher than 5k, as Pag-ibig says that you can open any number of MP2 accounts. The website also announced that we can increase our monthly savings (P1) any time, so it’s most likely the same with MP2. I’ll remove the maximum limit that I mentioned in the post.

  24. Hi Mam Nora , if i want to get MP2 how can i pay it ? do i need to go to pag ibig personally to apply for the first time? and for the first payment where can i deposit it? Thank u

  25. Hi Amycar, do you already have a Pag-ibig MID no.? If yes, register to get your MP2 account no. at pagibigfund.gov.ph. For your first payment, pay at your Pag-ibig branch and then for subsequent payments, you can pay at Bayad Center or SM Business Center.

  26. I have pag ibig MID no., what will i say to bayad center or sm business center what kind of payment is this? is there any charge for the payment at bayad center or sm business center. thanks

  27. Mrs Nora, if in case there’s an accident or the MP2 member passes away, to whom will the savings go? There’s no portion in the form for benefeciaries if ever in case something happens to the member. thank u

  28. Hi Amycar, Pag-ibig follows the law on heirs. If you’re married, your primary beneficiaries are your spouse and children. Your secondary beneficiaries are your parents. If you’re single, your primary beneficiaries are your parents, and your child/children, if you have. Your secondary beneficiaries are your siblings. Your heirs will be required to show birth certificates and marriage certificate to prove their relationship to you. You can see these in this Pag-ibig Proof of Surviving Legal Heirs form.

  29. Hi Amycar, say Pag-ibig contribution. Write your Pag-ibig MID no. There’s no charge. It’s free. But if you’re a new member, and you were never an employed Pag-ibig member before, make your first payment at the branch nearest your residence or work. Bring your ID and any proof of your source of income.

  30. Is there someone who have claimed mp2 this year? if mp2 started 2010, there should be members who have already claimed this year. tnx

  31. Hi Amycar, sorry I don’t know anyone who has claimed MP2, but if one is eligible to claim, he should be able to claim. I haven’t read any MP2 complaint online. I know someone who got his POP the same day that he claimed his POP years ago. This year, he got his P1 two weeks after filing.

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