How to compute Pag-ibig MP2 dividends?

how to compute pag-ibig MP2 dividends

If you already read my post about Pag-ibig MP2 and how to maximize it, then you might be wondering how the computations were done. I’ll be honest, it took me a while to understand it, and you’ll know why later. But after several hours, now I can confidently share with you how to compute Pag-ibig MP2 dividends.

What are the things to prepare?

It is just my recommendation to you so that you’ll have an easier time following the steps. Actually, you may skip this part, but trust me, it could save you more time and some brain cells too.

  1. Pen and paper
  2. Calculator
  3. Excel Sheet or Google Sheet
  4. Simple and compound interest formula

If you’ll go for the manual method, prepare a pen and paper so you can easily jot down the results. You may use any calculator, but a scientific calculator is more efficient, especially if you know how to use the summation function.

You may also use an Excel sheet to make the job easier. But remember to familiarize yourself with the simple and compound interest formulas.

How to compute Pag-ibig MP2 dividends?

What I’ll be showing you is the computation for the examples provided by Pag-ibig on its official website. The dividend rate used is 7.5%. Again, it is just an example because the actual dividend rate will still depend on the actual performance of the Pag-ibig fund.

However, for your personal computations, you may use the average dividend rate for the past 5 years.

READ: 5 Steps to Achieve Financial Freedom

So here’s how to compute for Pag-ibig MP2 dividends.

1. Monthly contribution with yearly dividend payout

You’ll earn Php 5,718.75 if you will continuously invest Php 500 per month for the next 5 years and opted for the yearly dividend payout. That’s around 19% of earnings from your total capital of Php 30,000.

Year

Monthly Savings (MS)Accumulated MS per YearCumulative SavingsAnnual Dividend PayoutTotal Accumulated Value TAV)
15006,0006,000243.756,000
25006,00012,000693.7512,000
35006,00018,0001,143.7518,000
45006,00024,0001,593.7524,000
55006,00030,0002,043.7530,000
TOTAL30,000.005,718.7530,000

Now, let’s compute for the yearly Pag-ibig MP2 dividends.

I prepared a table below so you can visualize how it is done.

Month

1st Year2nd Year3rd Year4th Year5th year
January5006,50012,50018,50024,500
February1,0007,00013,00019,00025,000
March1,5007,50013,50019,50025,500
April2,0008,00014,00020,00026,000
May2,5008,50014,50020,50026,500
June3,0009,00015,00021,00027,000
July3,5009,50015,50021,50027,500
August4,00010,00016,00022,00028,000
September4,50010,50016,50022,50028,500
October5,00011,00017,00023,00029,000
November5,50011,50017,50023,50029,500
December6,00012,00018,00024,00030,000
TOTAL39,000111,000183,000255,000327,000
AVERAGE3,2509,25015,25021,25027,250
DIVIDEND243.75693.751,143.751,593.752,043.75

The first step is to get the Average Accumulated Monthly Savings (AAMS) for each year. Secondly, use the simple interest formula to get the dividends. It is done by multiplying the result from the first step by the dividend rate.

If you forgot, the formula is “I = Prt.”

Where:
I= interest earned
P=Principal
r= rate of interest per year
t= time

In this case, “t” is equal to one since we will compute the yearly dividends.

So, for example, in the first year, the AAMS is equal to Php 3,250. And then, multiply it by the dividend rate of 7.5%. The result is the dividend for the first year, which is 243.75.

The dividends for the succeeding years are computed in the same way. I’ll just leave it with you as an exercise.

2. Monthly contribution with compounded savings

It is where things can get a little complicated if you opt for a monthly contribution with compounded savings. But fret not, I have a clear demonstration of how to get the numbers.

RELATED: The Rule of 72 | Compounding of Interest Made Easy

YearMonthly Savings (MS)Accumulated MS per YearCumulative SavingsDividend AmountTotal Accumulated Value (TAV)
1500.006,000.006,000.00243.756,243.75
2500.006,000.0012,243.75712.0312,955.78
3500.006,000.0018,955.781,215.4320,171.21
4500.006,000.0026,171.211,756.5927,927.81
5500.006,000.0033,927.812,338.3436,266.14
TOTAL30,000.006,266.1436,266.14

The general idea is, in the first year, you’ll just compute for the simple interest earned. In the second and succeeding years, you have to get the simple interest for that year and the interest from the previously earned dividends.

Thus, it is called compounding interest because your interest gets to earn interest.

But before the computation, here is the summary of dividends in the first example:

  1. 243.75
  2. 693.75
  3. 1,143.75
  4. 1,593.75
  5. 2,043.75

Again, the dividend in the first year is Php243.75. It is the same as the first example.

In the second year, it will be the 2nd year dividend from the first example plus the interest earned from the dividend in the first year. So here’s how it will look in an equation.

2nd-year dividend = Php693.75 + (Php243.75)*0.075 = Php712.03

In the 3rd year, it will be the 3rd year dividend from the first example plus the interest earned from the first and second-year dividends.

3rd-year dividend = Php1,143.75 + (Php712.03 + Php243.75) * 0.075 = Php1,215.43

Again, I will just leave the remaining years as an exercise.

3. One-time contribution with yearly dividend payout

If you are planning to make a one-time investment with a yearly dividend payout, then this computation can help you forecast your earnings in the next 5 years.

YearMonthly Savings (MS)Accumulated MS per YearCumulative SavingsAnnual Dividend PayoutTotal Accumulated Value TAV)
11,000,0001,000,0001,000,00075,0001,000,000
2001,000,00075,0001,000,000
3001,000,00075,0001,000,000
4001,000,00075,0001,000,000
5001,000,00075,000.1,000,000
TOTAL1,000,000.00375,0001,000,000

It is the most simple and straightforward computation. You will just have to multiply the capital by the dividend rate.

So, in this example, the dividend is equal to Php 75,000.

As you can see, the dividend for each year is the same because the Total Accumulated Value (TAV) stays the same. It is a different case if you choose to compound your savings.

4. One-time contribution with compounding savings

If you read my article on how you can maximize the Pag-ibig MP2 dividends, you will know that this computation will give you the highest earnings.

Basically, there are two key points behind it.

  • The capital is already earning the full dividend rate for each year. Unlike monthly savings, where you will only get a fraction of the rate for each monthly contribution.
  • The interest gets to earn interestcompound interest.
YearMonthly Savings (MS)Accumulated MS per yearCumulative SavingsDividend AmountTotal Accumulated Value TAV)
11,000,0001,000,0001,000,00075,0001,075,000
2001,075,00080,6251,155,625
3001,155,62586,6721,242,297
4001,242,29793,1721,335,469
5001,335,469100,1601,435,629
TOTAL1,000,000435,6291,435,629.33

READ: 5 Strategies to Get the Most Out of Pag-IBIG MP2

Now, we’ll use the compound interest formula to compute the dividends.

So here’s the formula.

FV = PV (1 + r) ^ t

Where:
FV = Future Value
PV = Present Value
r = rate of interest per year
t = number of periods lapsed (no. of years)

Let’s use it to compute the future value of your one-time investment after 5 years.

FV = 1,000,000 * (1 + 0.075) ^ 5 = Php 1,435,629.33

It is a growth of 43.6% on your capital compared to 37.5% if you opt to get your dividends each year.

You might be thinking, “The difference is small.”

It is true. But, it is still a 6.1% difference.

However small, the difference will become more evident if you are planning to invest beyond 5 years.

Happy investing 🙂

GET NOW: Pag-IBIG MP2 Calculator | A Must-Have Toon in Investing For MP2

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73 thoughts on “How to compute Pag-ibig MP2 dividends?

  1. If nagstart ako ng 500 Monthly contribution ng May 2017, ang 5th year ko is April 2022. Please show po ang computation ng dividend for the 5th yr since 4 months na lang yun contribution ko. let say the interest is 6% for 2022. Thanks.

  2. last December 2, 2019 nag deposit ako ng 30k sa MP2 tama ba na 3,949 lang ang tubo? Baka pwede ma explain pano na-compute yung 3949? Salamat

  3. Hi Sir,

    Thanks for the great explanation, I have one question about the maturity

    I started contributing to MP2 last June 2022, I understand that the maturity will be on June 2027. They usually announce the previous year’s dividend rate in the month of March, below are two scenarios that I want to clarify.

    Maturity: June 2027

    Collection date 1 (July 2027)
    – Will I be getting dividend earnings from Jan 2027 – Jun 2027 using the MP2 2026 rate?

    Collection date 2 (Dec 2027)
    – Will I be getting dividend earnings from Jan 2027 – Jun 2027 using MP2 2026 rate than July 2027 – Dec 2027 using the P1 2026 rate?

  4. I started saving in MP2 in Nov2021. I remitted the ff: P46,000-Nov, P500-Dec. The dividend I received was P235. No matter how I compute I cannot arrived at P235. May you enlighten me?

    1. I got 232.5 using our Pag-IBIG MP2 Calculator. Keep in mind that there’s a slight deviation from the actual result because of the way it was computed. Nonetheless, it’s very useful to predict, project, and keep track of your contributions.

      Btw, if you’re doing manual calculations, it will be based on a daily accumulation. So if you have invested, let’s say last November 30, you’ll only get one day’s worth of interest for that month instead of one whole month’s worth of interest.

      1. I am satisfied with the explanation since I made the payment late in November. My other concern is Pag-IBIG announced two dividend rates for the year 2021(based on my google search) – 5.66% and 6%. May you share the link where to get the final figure?

  5. Can you clarify this scenario:

    The dividend rate for 2021 was recently declared at 5.66%, which I believe shall apply to the total contributions made in 2021. What if the MP2 matures in March 2022, what rate shall be used in the computation from January to March, 2022?

  6. hi Sir gonna ask lang If I choose annually dividend payout does it mean I will get annual dividend for 5 years? or just that for only 1 year? sorry I’m kind of confuse hehe

  7. Hi sir. On your TABLE 2 where contribution of 500 per month were listed down, how come the total contribution for year 1 is 39000? Isn’t it just 6000? And since the dividend is computed to the average contribution the dividend would be based on 500, hence,
    Y1 = 37.5php
    Y2 = 75.23
    Y3 =113. 20
    Y4 = 151. 41
    Y5 = 227.36

    So total earning for 5 yrs would 604.70 pesos. Please correct me sir if i did not get it.

    1. All the results shown in this blog are actually based on the official pub mat released by Pag-IBIG. You can check the validity of the computation versus the said material.

      The computation is simple but rather tricky. The “total” I was referring to was the total accumulated monthly savings. You just have to know your cumulative investment every month,

      So for example, you saved 500 per month then for the month of January your cumulative investment is 500. By February, it will be 500 from January PLUS your new investment of 500, i.e. Php 1000. For March it will be Feb plus 500 or simply 1,500 and so on. Now, when you finished the year, add the cumulative monthly investment.

      500 + 1000 + 1,500 + 2,000 + 2,500 + … = 39,000

      Then get the average by dividing 39,000 by 12 (months).

      Why are we doing this? Because your money is compounded monthly. Oops…I think this will get a bit more technical. I’m planning on creating a video about this and I’ll also release a Pag-IBIG MP2 calculator.

      But for now, I hope it helped you. Thanks 🙂

  8. Hi sir. What if I made a one time contribution every year? For example, i invested 50k for jan 2021, then another 50k in jan 2022, 2023, 2024, 2025. Is this possible?

  9. Hi Sir Federico. I would like to ask for the recommendation which is a better option between one-time payment, annually, or monthly payment every year? Thank you so much!

  10. Hi Sir Federico. How to compute the dividend let’s say I started saving in February, but I failed to deposit for the month of April, but on the next month (May), I deposited an amount that will cover both April and May.

    I tried to create an Excel file for this, but the dividend that reflect on my virtual Pag Ibig is not tally, compared to the dividend that was generated on the Excel file. By the way, I followed the steps/computation here.

    1. Hi Thessa. It should be the same. Of course, just put zero if you missed any month and if you add more then indicate the additional investment. Just follow the steps and you should be able to compute for the dividends. Thanks 🙂

  11. Hi Sir. You gave an example of 7.5% rate throughout 5 years. However, for Compound Savings for 5 years, I started saving on PAGIBIG way past 2016 which has a rate of 7.43% and 2017 – 8.11%.

    Base on your computation for Compound Savings of 5 years, what rate will I use? Is it 7.43% throughout 2016-2021? Or is it based on yearly dividend rate? Thank you for your answer.

    1. Hi July. It will actually depend on you. As mentioned, the computations are only made to forecast the investment return. So you may use any rate you are most comfortable with, be it the 7.5% or the average rate for the past 5 years. The examples here with a 7.5% rate are only aligned to the official samples shared by Pag-ibig. Thanks 🙂

  12. Hello Sir,

    I deposited my first MP2 contribution last May 2019, then I stopped. I just made another contribution to my MP2 account just this month, January 2021.

    The maturity year remains to be 2024, 5 years after 2019, is that correct?

    The crediting of the annual dividends will also be the same, every month of May?

    That means, anything I saved during the 5-year period will be available for withdrawal on May 2024?

    Thanks in advance 🙂

  13. Hi Sir Federico. I started to open my mp2 account last Dec. 2019. The last year 2020 I saw how much dividend I earned from the year 2019. And I continue to save from January, March, and December 2020 with different amounts. I am checking on the Pag-ibig virtual how much dividend I earned for the year 2020 but it didn’t show. Is there a another possible way for me to check my dividend from my previous year? Thank you.

  14. Hi Sir Federico, if I start off with a lump sum of 100,000, can I top-up anytime or do I need to enroll in another savings account? Tnx.

  15. When I opened an MP2 account two years ago, it was not specified if the dividends would be withdrawn annually or after 5 years…I continue contributing, anyways… what’s your take on this, sir?

  16. How can I see the computation in MP2, example if I invest 100,000 . I want to see the divident of this amount .

    Thank you
    Cynthia

    1. Hi Cynthia. You have to compute it yourself just follow the steps presented here. As mentioned, you will also make an assumption of the average return that you will be using for the computation whether it’s the last year’s return, the last 5 years, and so on. Thanks 🙂

    2. Hi Federico, I just want to ask if your monthly MP2 contribution is 500 the next mth you accumulate 1000, what if 1000 monthly the next mth is 2000? Thanks!

  17. Hi Sir,

    For a Yearly Contribution, does it matter if you are going to put in the money one time is January or one time in June, or One time in December? Thanks!

    1. Hi Jhun. You may start at any month. The only good thing about starting in January is that you’ll get a full year’s worth of dividend. Well, of course, aside from starting the year right. Thanks 🙂

  18. If I decide to invest a lump sum of Php 300,000 for the first month plus Php 5,000 and in the succeeding months you decide to add the same Php 5,000 monthly. How much would I get?