SSS Flexi-Fund vs. Pag-ibig MP2 — Which Is a Better Investment?

Updated June 2, 2014:

Both SSS Flexi-Fund and Modified Pag-ibig 2 (MP2) are savings programs offered by government agencies.

Both offer interest rates higher than those offered by banks for savings accounts and time deposits.

Both programs are guaranteed by the Philippine government.

Both are tax-free. Total savings plus their dividend or interest earnings are tax-free.

Both are SAFE savings plans. You will never lose your money in case you lose your job or business and you are not able to continue making your monthly payments.  With many pre-need and insurance investment plans, you will lose all or a big portion of your money if you fail to continue paying.

Here are the differences between the 2 programs:

Membership:

MP2 is offered to all Pag-ibig 1 members.

Flexi-Fund is offered ONLY to OFWs who are SSS members.

Minimum Monthly Contribution:

The minimum monthly savings amount for MP2 is 500 pesos.

The minimum for Flexi-Fund is 200 pesos.

Mandatory or Regular Savings and Optional Savings:

Under MP2, you need to continue paying at least 100 pesos to Pag-ibig 1.

Under Flexi-Fund, you need to continue paying the maximum monthly contribution, which is 1,760 pesos.

Member Nos.:

For Pag-ibig, you have 2 different Pag-ibig nos: one for MP2 and another for Pag-ibig 1.

For SSS, you use the same SSS no. for regular SSS and for Flexi-Fund.

Payment:

You pay MP2 and Pag-ibig 1 contributions separately. Remember, you have 2 different nos.

You pay Flexi-Fund and regular SSS as one item in a single receipt. SSS will be the one separating your payment. It will post 1,760 pesos to your regular SSS account, and will credit the excess to your Flexi-Fund account.

Pay at least 1,960 pesos (1,760 for your regular SSS account + 200 for your Flexi-Fund). For example, you want to contribute 1,000 to your Flexi-Fund, pay 2,760 pesos (1,760 for your regular SSS and 1,000 for your Flexi-Fund).

If you want to save 2,000, you pay 3,760 (1,760 for your regular SSS and 2,000 for your Flexi-Fund).

Term of Savings:

For MP2, you choose a term of 5 years or 10 years. Or choose a term of 5 years then renew for another term. Default term is 5 years, if term is not chosen.

For SSS Flexi-Fund, choose a term of any number of years, from 1 year to 30 years.

Earnings Rate:

For MP2, the dividend rate is decided by the Pag-ibig board every year, based on total Pag-ibig earnings the past year. MP2 is always higher than that given to P1 contributions. In 2010, the dividend rate for MP2 was 5.5% and the rate for Pag-ibig 1 was 5%.

For SSS, the interest rate is also repriced and quoted every year. It is based on the current average 91-day Treasury bill rate.

Example of Earnings shown at the Pag-ibig and SSS websites:

Monthly Total in Total TOTAL
Savings 5 years Dividends SAVINGS
MP2 2,000 120,000 19,687 139,687
FF 2,000 120,000 19,876 139,876

So if you can just save 5k a month for 5 years while abroad, you can see about 350,000 in your account the day after you arrive at the Manila airport.

One-Time Deposit:

SSS Flexi-Fund has a One-Time Deposit option, just like a time deposit at a bank. You can contribute 100,000 pesos or more as a one-time deposit.

You Can See your Money Growing:

For Flexi-Fund, enroll in Online SSS, so you can see your Flexi-Fund contributions anytime online.

For MP2, as of today, online checking of contributions is offered to OFws only.

Withdrawal:

Under MP2, you can now withdraw your money anytime before your 5-year term. Previously, you could not. This policy change was announced this January 2013. But always expect a 5-year term, so you will not be frustrated in case their withdrawal policy changes again.

Flexi-Fund is also flexible — you can withdraw anytime, in full or in partial amount.
But if you withdraw savings that have stayed with SSS for less than a year, you will be charged with pre-termination fees (10% or 20% of net earnings).

How to Start:

For SSS Flexi-Fund, fill up the OW-1 form and submit to the SSS Representative at the Philippine consulate where you are, or send to the SSS address written in the form:

SSS
International Operations Division
SSS Building, East Avenue, Diliman, Quezon City
1100 Philippines

If you’re in the Philippines, you can submit your OW-1 form at any SSS branch. Bring your Overseas Employment Certificate (OEC) and IDs.

For MP2, enroll at the Pag-ibig website: pagibigfund.gov.ph, click E-Services, then MP2 Enrollment.
If you don’t have yet a Registration Tracking Number or POP Temporary Number, get first your Transaction no. and Pag-ibig MID No. by going back to E-Services, click Membership registration.

Note:

For members of POP (Pag-ibig Overseas Program — the original US dollar, Canadian dollar and peso savings program for immigrants, OFWs and other types of overseas Filipinos),  you can continue saving under this POP program, or you can also start saving under MP2.

POP members can stop their POP membership as long as they have completed paying their housing loans taken under POP.

113 Comments

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  1. question lang po, pano po machecheck ung contribution sa MP2? di ko po makita sa website nila, ang meron lang ung contribution sa POP.wala po akong mkita ung mismo para sa MP2 lang, kse separate nga account for MP2 and POP.
    awaiting your reply. thanks po!

  2. hello mam Nora good day. May I ask what 90 days treasury bill at SSS flexifund means. Isn’t it that flexifund is saying that you make a time deposit of 100 thousand pesos in one time payment then it becomes 130 thousand pesos after 5 years. It’s in their sample. Is that true or is it only a sample. so the interest of 100k pesos for 5 years is 30 thousand pesos?thank you mam.

  3. Hi evangeline, I’m glad you’re researching investments. 91-day treasury bill is one of the investment instruments offered by the government, and SSS is investing Flexi-Funds in this instrument. Flexi-Fund also gives annual incentive benefit. Last year, Flexi-Fund members earned around 4.2%.
    That 30k earnings total that you saw is only a sample. Rates have fallen so expect lower earnings these years. A 4% rate for 5 years will give an interest of around 22k minus management fee of 1%. But I think Flexi-Fund is still better than time deposit.

  4. Hi mam Nora blessed day.thank you for answering my questions.mam how is MP2 of pagibig? It’s posted that 300k pesos will increase to 350k after 5 years. It has an interest of 50 thousand. Is that true or is that a sample too? thank you God bless you mam Nora.

  5. Hi evangeline, thank you for wishing me blessings. Wish you blessings too. It’s great that you’re looking where to save. About that 50k interest, that’s also just a sample. If you check the small notes below the page, it’s written there that those are only estimates. Flexi-Fund and MP2 can guarantee you that your money will earn and will earn more than if you deposit them in banks, but they can’t guarantee the exact interest rates. If you like, you can save/invest in Flexi, MP2 and a 5-year time deposit in a bank (look for one with free life insurance or with a raffle promo; choose from the big savings banks).

  6. Hi Nora thanks for replying, at least I got cleared up about some things. I hope and pray that we will get back our money. Isn’t it that this is guaranteed by our government? So there’s no doubt that we won’t lose our money.thank you so much for always responding to our questions.God bless you more.

  7. Hi evangeline, thanks also for commenting. Yes, Pag-ibig and SSS are government institutions, and our savings with them are government-guaranteed. Pag-ibig and SSS have had financial problems before, like bad investments and unpaid housing loans, but they surpassed them even without getting direct financial aid from the government, so that means they’re relatively strong. SSS however is said to need some more changes in order for it to be sustainable for the younger generation, specially regarding pensions. Pag-ibig is well-managed now, as they’ve been very strict with housing loan collections, and SSS is now offering its housing loans only to organized groups. Pag-ibig has just released a list of MP2 members who can claim their savings that have matured.

  8. Hi good day, is it easy to withdraw from flexi fund like at the bank when there’s family emergency?

  9. Im a member of this MP2 for Pag-ibig. I regularly deposit thru GCASH. One thing I can say with this is, checking the status of your contribution. It is Manual, you need to email pag-ibig then request for your updated statement of account. This will take you about 3-6 weeks with consistent follow-up before they can release the updated statement of account. Still, 5% to 6% dividend rates are higher than any savings account also with the current inflation that ranges is 4-5 %. Happy Investing/Saving. cheers.

  10. Hi Tonio, thanks for sharing very helpful info. It will help others. You write well, so I hope you can email also Pag-ibig and suggest that they also extend their online contribution verification service to local members. They can start with MP2, if they don’t yet have the funds for every member (those of mandatory savings). Thanks again.

  11. Hi Manuel, based on comments on online forums, no, it’s not easy. Withdrawal is not immediate. So it’s also good to save some money in a time deposit with a bank.

  12. Hello Nora, I have a question. If I register for SSS Flexi Fund in the month of December 2014, can I still make the contributions for the whole of 2014? I am an OFW and my regular contributions to SSS is in the maximum. Kindly advise.Thanks Virgilio

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