Updated March 5, 2018
Pag-ibig MP2 was launched in February 2010 as an enhanced Pag-ibig savings program for all Pag-ibig 1 members. SSS Flexi-Fund was launched in May 2002 as a savings program exclusively for OFWs.
In May 2015, SSS launched another savings program called PESO, which stands for Personal Equity and Savings Option, and this time, it is offered to all types of SSS members. There’s an age restriction though — only those younger than 55 years old can save with PESO.
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 regular Pag-ibig 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. This means, your regular monthly contribution can be less than the maximum 1,760 pesos. Your employer will do the regular SSS 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: MP2 dividend rates from 2010 to 2017 ranged from 4.58% to 8.11%.
PESO: The assumed fund growth rates for SSS PESO are 3.75%, 1.85% and 1.85% per year (may be higher or lower) for Retirement Account, Medical Account and General Purpose Account, respectively.
6. MP2: You can claim your total MP2 savings and dividends after 5 years. After claiming, if you like, you can apply for a new MP2 account and reinvest all or part of what you have just claimed as a one-time payment into your new MP2 account. You can continue to add to it and continue saving with it for another period of 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. There are penalty and service fees for withdrawals within the 5-year retention period.
7. 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.
8. 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.
9. MP2: You can apply for a new MP2 account after you have claimed your 5-year MP2 savings and dividends.
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 Individually-paying members.
In addition, the dividend rates for Pag-ibig MP2 since 2010 has been much higher than earning rates estimated for the SSS PESO.
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