How to invest in Pag-IBIG MP2 Savings Program: Earn better than banks

ultimate guide to investing in pag-ibig mp2

Last Update: June 21, 2024

Did you know that in 2010, Pag-IBIG, or the Home Development Mutual Fund (HDMF), launched a savings program called the Modified Pag-IBIG 2 (MP2) Savings Program? It gives their members a better option to grow their savings.

What is Pag-IBIG MP2?

There’s even a joke that goes like, “Huwag mong problemahin ang Pag-IBIG, kada buwan kinakaltas yan sa sahod mo.” However, it’s important to note that membership in Pag-IBIG regular savings is mandatory for all employees in the Philippines. The amount deducted from your salary depends on your monthly income, which means that the more you earn, the higher the amount that will be deducted.

On the other hand, Pag-IBIG MP2 is purely voluntary, which means that you can choose the amount and frequency of your contributions. If you are looking for a better place to put your savings, then this might be an excellent option for you. In fact, in 2017, the dividend rate even reached 8.11% p.a., which is considerably higher compared to the interest rates offered by savings accounts or time deposits.

READ: 5 Easy Steps to Achieve Financial Freedom

Who are qualified to apply for MP2 Savings Program?

Now, you might be wondering if you can start this program. And to help you, here are the qualifications:

  1. Open to all active members with at least one (1) month of contribution within the last 6 months.
  2. It’s also open to former members (pensioners and retirees) with other sources of income, with at least 24 months of contribution before. As per Pag-IBIG, natural-born Filipinos, who reacquired their Filipino citizenship pursuant to RA 9225, or the Citizenship Retention and Reacquisition Act of 2003, had at least 24 monthly savings prior to permanent migration to another country.

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How to Enroll in Pag-IBIG MP2 Savings Program?

If you are qualified, you may enroll in this program. You have 2 options, and you can do whichever works for you.

1. Fill out the “Modified Pag-IBIG 2 Enrollment Form” and then submit it to the nearest Pag-IBIG branch in your area. Prepare your bank details, because this is where your dividends will be credited.

2. Go to Pag-IBIG website and open an MP2 account. Prepare the following documents:

  • Pag-IBIG Membership ID (MID) Number
  • 1 valid ID
  • Selfie showing your valid ID
  • Proof of income or source of funds
  • Philippines Passport (if applicable)
  • Certificate of reacquisition or retention of Filipino citizenship (if applicable)

READ: How to Maximize Pag-IBIG MP2 Savings Account

How to Pay Pag-IBIG MP2 Contributions?

If you are currently employed, you can ask your employer for an arranged salary deduction. For instance, it’s a good choice if you want to automate your savings.

Aside from that, there are several ways to add to your MP2. And here’s a list of the different ways you can pay your contributions.

1. Virtual Pag-IBIG or Online
Go to Virtual Pag-IBIG or Pag-IBIG Online Payment Facility and pay your contributions.

2. Pag-IBIG Branch
You may go to any Pag-IBIG branch to pay for your contribution. However, branches and stalls situated in malls do not process payments.

3. Payment Centers
You may also pay your contributions at any SM Bills Payment Center, Bayad Center, M Lhuillier, or 7-11 Stores (via ECPay).

4. Online Payment Channels
If you prefer to do it online, you can pay via GCash and

5. Overseas Remittance Channels
If you are an OFW, you can pay it in any Asia United Bank, CashPinas Remittance partners, iRemit branches, PayPinas, PNB overseas branches, Ventaja agents.

What is the minimum contribution?

The minimum contribution is Php 500. Thus, it means that you can add any amount to your MP2 above PHP 500. Just bear in mind that you need to issue a check if your contribution is more than PHP 500k.

Historical Return of Pag-IBIG MP2

The Pag-IBIG MP2 is a government-guaranteed investment, which means that the money you are putting into Pag-IBIG is somehow safe. However, it’s important to keep in mind that dividends are not guaranteed and will depend on the actual financial performance of the fund.

So here’s the Pag-IBIG dividend rate since 2010.

YearDividend Rate (MP2)

READ: How to Compute Pag-IBIG MP2

Based on the table, the dividend rate keeps increasing each year. It even reached its peak in 2018, at 8.11%. Since 2016, the dividend rate has remained above 7% p.a.

How does Pag-IBIG MP2 earn?

Before you consider any financial instrument as a good investment, you must know if it has a sustainable source of income. In this case, Pag-IBIG MP2 generates income from investing 70% of its investible assets in house financing.

The remaining 30% is invested in Short Term Loan (STL) Programs, government securities (lending to the government), corporate bonds (lending to companies), and time deposits.

What are the advantages of Pag-IBIG MP2?

At this point, you might be thinking of the good aspects of Pag-IBIG MP2. So, I prepared 5 advantages of investing in Pag-IBIG MP2 to help you.

1. Higher Earning Potential than Banks

The earning potential of a financial vehicle plays a crucial role in investing. The only way to consider it a good investment is when it can beat inflation, which averages around 4%. That is to say, it’s something that savings accounts and time deposits cannot beat.

On the other hand, Pag-IBIG MP2 can beat inflation. In 2019, for example, Pag-IBIG announced a dividend rate of 7.23%.

2. Flexible Payment

In MP2, you have full control of how much and how frequently you want to invest. You may invest monthly, periodically (irregularly), or even in a lump sum. Thus, it is very flexible and adjustable to your needs and financial goals.

3. Affordability

You can start investing in MP2 with only PHP 500. Practically, all members can enroll in this program. But if you want to start with more significant capital, let’s say Php 1 million, it’s still okay.

4. Ideal for Mid-term Goals

The MP2 is ideal for mid-term financial goals. When you say mid-term,  it refers to goals within a 5- to 10-year timeframe. It might be perfect for purposes like buying a car, a house, starting a business, etc. In short, anything you want to begin within 5 to 10 years.

5. Secured and Tax-Free

Aside from the high earnings, security is one of the best things in MP2. Above all, because it is offered by the government, which means that your money is safe.

It refers only to capital because dividends are not guaranteed.

Secondly, it is exempt from the gains tax, which is equal to 20%. Thus, unlike a savings account or time deposit, you will get your earnings in full.

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

What are the disadvantages of Pag-IBIG MP2?

However, just like any investment, MP2 also comes with disadvantages that you must know before enrolling in this program.

1. Lock-in Period

There is a lock-in period of 5 years. That’s why you must be committed when you enroll in this program. Because if you decide to withdraw within the lock-in period, you may not get the dividends.

2. No Automatic Rollover

Another limitation is that the rollover of investment is not possible. After 5 years, if you do not get your money, it will be placed in regular Pag-IBIG savings, which will earn at a lower rate. Most importantly, after another year, it will no longer receive dividends.

3. Open a new account every 5 years

After 5 years, you have to open another MP2 account if you want to roll over your investment. Though, it’s relatively easy to open an account, the challenge is on monitoring the maturity of your investment.

4. No Online Facility

Currently, there is no online facility to monitor your investments. Thus, the only way to check your account is by going to a Pag-IBIG branch.

5. Higher Earning Potential in Mutual Fund and UITF

On the other hand, while MP2 has a high dividend rate, some mutual funds and UITFs have reported higher returns. You may consider diversifying your investments for added protection. Similarly, just like the old saying goes, “Do not put all your eggs in one basket.”

READ: How to Open Sun Life Mutual Fund via Online

Sample computation of earnings

I know you hate numbers, and so, do I, but it’s something that we cannot take away from investing.  So please spare me from hate. Thus, I’ll share with you a table of how you’ll earn with MP2 in 2 scenarios.

Below, you will see an estimate of earnings in two scenarios*.

  • A monthly contribution of Php 500 for the next 5 years
  • A one-time investment of Php 30,000.

*The dividend rate used is 7.5%, and it is assumed that dividends are left with Pag-IBIG to earn more dividends.

YearMonthly (P500)TotalOne-time (P30k)Total

After 5 years, you will get a total of Php 36,266.14 if you regularly invest in MP2. However, it’s Php 43,069 if you make a one-time investment of Php 30,000.

That’s a huge difference in profit, right? But don’t get me wrong. I’m not telling you that investing in a lump sum is the only way to go. In other words, just maximize what you have.

Certainly, the important thing here is that you are making progress.

Comparative Analysis

So now, let’s compare the returns on investments of time deposits, regular Pag-IBIG, and MP2 in the last 5 years. The data comes from the BSP report and Pag-IBIG financial reports.

YearTime DepositPag-IBIG RegularPag-IBIG MP2

RELATED: How to Maximize the Earning Potential of Pag-IBIG MP2

Looking at the table, MP2 consistently provides a better return on your investment year after year.

When to receive the dividends?

You have 2 options for getting your dividends, i.e., yearly or after 5 years.

  1. If yearly, you will get your dividends every year in your bank account. Then, after the lock-in, you will receive your capital.
  2. After 5 years, you will get the dividends along with your capital after the lock-in.

But what if you closed your MP2 account before maturity?

There are special instances wherein you are allowed to terminate and withdraw your MP2 savings. But it’s only applicable if you lose your job due to health reasons, the company where you are working is closed, you get critically ill or if a family member dies (certified by a licensed doctor), migrates, etc. Just keep in mind that it is still subject to review.

Meanwhile, if you opt for the first option, you will get your total savings minus the dividends received. However, in the second option, you will only receive 50% of the dividends.

GET NOW: Pag-IBIG MP2 Calculator | A Must-Have Tool for Investing in MP2

10 thoughts on “How to invest in Pag-IBIG MP2 Savings Program: Earn better than banks

  1. Hello, what do you mean by the below?

    Meanwhile, if you opt for the first option, you will get your total savings minus the dividends received. However, in the 2nd option, you will only receive 50% of the dividends.

    Medyo na guluhan ako dun sa 2nd option. I opted for annual dividend payout pero gusto ko pala sana ng after 5 yrs nalang para compounding ung interest. pero dko maintindihan ung ‘50% of the dividends’ lang marereceive sa 2nd option. What does that mean po? can you enlighten me? Thanks.

    1. The context is above that paragraph. I’m referring to early withdrawal or pre-termination of MP2 accounts.

      As for the other question, no, you can’t change your dividend payout option at the middle of the term. The workaround I see is to open another account for the yearly dividend payout. It’s almost the same thing with extra steps. I hope it helps.

  2. Hi author,
    My question is, let say in year one i contribute every month amounting to P2000 per month and next year i increase my monthly to P5000, then i will put up a lumpsum example P100K, is that allowed?

    I look forward for your kind reply

  3. Hi, I am employed but I just wanted to pay on my own, rather than my employer deducting it from my salary. Can I do that? Thank you.

    1. This is purely voluntary, as mentioned in the blog, which means your employer or anyone doesn’t have to know that you opened an account. You may treat it as opening a time deposit account in a bank.

  4. “A one-time investment of Php 30,000.”

    Hello can you please explain how can we open one time contribution on mp2 wherein the option available only is monthly contribution. As per your example i want a one time contribution of Php 30,000 i will create a 30,000 monthly contribution and i will contribute only the first month and the succeeding month i will just ignore it and on the way i am also allowed to add fund again any month during the 5 years period am i right?

    1. In reality, there’s are only two options when you open an MP2 account, i.e. annual payout and compounded dividends. Answering your question, yes, you can contribute the 30,000 upon opening an account and forget about it until maturity. If along the way, you decided to add more, that’s totally fine.

      In short, you can contribute at any time.

  5. Hi Sir Federico,

    I started my MP2 savings in 2017, if I’m not mistaken, in August of 2017. However, there were gaps in my contribution, so as of July 2021, my total monthly contributions are at 47 months up to September/October 2021.

    My concern is if it “matures” by July 2022, is there an extension of another 4 months for me to total it to 60 months?? Or should I withdraw my savings by July 2022 (5 years after August 2017) based on the total number of months that I have contributed, let’s say a total of 56 months?

    Please enlighten me.

    Thank you and more power!

    Luningning Vera U. Barcenas

    1. Hi, Ms. Luningning. Your account will mature after 5 years regardless of whether there are gaps in your contributions. Pag-IBIG MP2 is purely voluntary membership so you’ll not be required to pay for the gaps. But if you wanted to complete it, you may do so by paying the 4 months you missed on top of what you regularly invest in your MP2 account.

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