SSS has just launched another savings program called PESO, in May 2015.
PESO means Personal Equity and Savings Option.
Pag-ibig launched its savings program MP2 in February 2010.
SSS launched its Flexi-Fund savings program in May 2002, but it was offered only to OFWs, and until now, Flexi-Fund is only for OFWs.
Now, let’s compare the 2 savings programs available for local income earners, or non-OFWs — the Pag-ibig MP2 and SSS PESO.
Which is a better savings scheme? Pag-ibig MP2 or SSS PESO?
What are the same with MP2 and PESO?
1. Both are voluntary savings schemes.
2. Both are tax-free.
3. Both are guaranteed by the Philippine government.
4. Both offer interest rates higher than banks’ savings rates.
5. Both do not require monthly payments, meaning you are not penalized if you miss a monthly payment.
You do not lose your savings if you miss one or more monthly payments.
6. Both are offered to non-OFWs or OFWs who are Pag-ibig and SSS members.
7. Both require membership in their regular programs (regular Pag-ibig or regular SSS program).
What are the differences between MP2 and PESO?
1. MP2: The minimum monthly savings amount in MP2 is 500 pesos.
PESO: The minimum in PESO is 1,000 pesos.
2. MP2: MP2 allows you to save as much as you can. There is no maximum savings amount.
PESO: PESO imposes a maximum. The maximum savings amount in PESO per year is 100,000 pesos.
3. MP2: Before you pay your monthly savings with MP2, you need to pay at least 200 pesos to your regular Pag-ibig savings for the same month.
This applies to Voluntary, Self-Employed or OFW members.
If employed, you need to pay at least 100 pesos. Your employer will do the deduction and remittance to Pag-ibig.
PESO: Before you pay your monthly savings with PESO, you need to pay the maximum monthly regular SSS contribution, which is currently 1,760 pesos. for the same month. This applies to Voluntary, Self-Employed or OFW members.
If employed, you need to pay your regular SSS contribution based on your monthly salary credit. Your employer will do the deduction and remittance to SSS.
4. MP2: Before you register with Pag-ibig for MP2, you need to have paid at least one monthly savings to your regular Pag-ibig.
PESO: Before you register with SSS for PESO, you need to have paid at least 6 consecutive monthly contributions within the last 12 months prior to your month of registration.
5. MP2: You can claim your total MP2 savings and dividends after 5 years. If you like, you can also renew and continue saving for another 5 years.
PESO: You are not allowed to claim all of your PESO savings after 5 years. You can withdraw only up to 35% of your total PESO savings after 5 years for your medical, educational, housing, and livelihood needs. The rest is allotted for your retirement, when you turn 60 or older.
6. MP2: There is no maximum age limit set by Pag-ibig for MP2 registration.
PESO: SSS requires that you are younger than 55 years to register for PESO.
7. MP2: You register to get your MP2 account no. and use it when paying.
PESO: You use your SSS no. to pay your PESO savings.
8. MP2: You can have more than one MP2 account.
PESO: You can have only one PESO account.
So which is better? Pag-ibig MP2 or SSS PESO?
I think saving with Pag-ibig MP2 is easier and more practical for Voluntary and Self-Employed members. The SSS PESO requirement to pay the maximum monthly contribution, which is currently 1,760 pesos, is not affordable to many members.
The good thing about PESO, MP2 and Flexi-Fund is that there are now at least 3 options for individuals to save, especially for those who cannot afford to absorb the risks of investing in mutual funds, stocks, or other investment instruments.
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Compare SSS Flexi-Fund and Pag-ibig MP2