SSS Flexi-Fund vs. Pag-ibig MP2 — Which Is a Better Investment?
Both these 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.
Here are the differences between the 2 programs:
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.
Regular and Special:
Under MP2, you need to continue paying at least 100 pesos to Pag-ibig 1.
Under Flexi-Fund, you need to continue paying the highest monthly contribution, which is 1,560 pesos.
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.
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 1,560 pesos to your regular SSS account, and will credit the excess to your Flexi-Fund account. Pay at least 1,760 pesos (1560 + 200).
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.
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 P1 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:
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.
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.
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.
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.
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 POP members, I think the P1 contribution requirement was not implemented strictly because of the timing of the relevant circulars.