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

Pag-ibig MP2 Savings Program

What comes to mind when you hear Pag-ibig? Oh yes, aside from your crush, it’s house loan, right? Apart from that, in 2010, Pag-ibig or the Home Development Mutual Fund (HDMF) has launched a savings program called Modified Pag-ibig 2 (MP2) Savings Program. It gives members like you a better option to grow your savings.

What is Pag-ibig MP2?

You are already familiar with Pag-ibig, right? There’s even a joke that goes like, “Huwag mong problemahin ang Pag-ibig, kada buwan kinakaltas yan sa sahod mo.” But really, it’s a mandatory membership to all employees in the Philippines. And the amount you are putting in your fund depends on your monthly salary unless you amend it.

On the other hand, Pag-ibig MP2 is purely voluntary in terms of the amount and frequency of contributions. So if you are looking for a better place to put your savings, then it might be for you. In 2017, the dividend rate even reached 8.11% p.a. Something you will not get from a savings account nor time deposit.

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. Active Pag-ibig members can apply.
  2. All members who have paid at least 24 months of contributions before retirement

But what if you are an active member but have less than 24 months of contributions?

Well, if you wish to start saving in this program, you must pay the remaining months. So, for example, you only paid 15 months, then you must advance the payment for the remaining 9 months before you can open an MP2 account.

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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-big 2 Enrollment Form” and then submit it to the nearest Pag-ibig branch in your area. Prepare your bank details because it is where your dividends will be credited.

2. Apply via online. Go to Pag-ibig official website and look for MP2. You must ready your Pag-ibig MID No.

READ: How to Maximize Pag-ibig MP2 Savings Account

How to Pay Pag-ibig MP2 Contributions?

If 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 and if planning to add on it every month.

Aside from it, there are several ways to add in your MP2. And here’s a list of the different ways on how 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 in any SM Bills Payment Centers, Bayad Center, M Lhuillier, and 7-11 Stores (via ECPay).

4. Online Payment Channels
If you prefer to do it online, you may pay it 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 Php500. Just bear in mind that you need to issue a check if your contribution is Php500k and above.

Historical Return of Pag-ibig MP2

The MP2 is government guaranteed, which means that the money you are putting in Pag-ibig is safe. However, 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.


Dividend Rate (MP2)

2019 7.23%
2018 7.41%
2017 8.11%
2016 7.43%
2015 5.33%
2014 4.68%
2013 4.59%
2012 4.67%
2011 4.63%
2010 5.5%

READ: How to Compute Pag-ibig MP2 Dividends

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

How does Pag-ibig MP2 earn?

Before you consider a 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. It is the primary purpose of Pag-ibig HDMF.

The remaining 30% is invested in Short Term Loan (STL) Program, 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 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 as a good investment is when it can beat inflation, which averages around 4%. That is to say, it’s something that savings account nor time deposit cannot beat.

On the other hand, 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 lumpsum. Thus, it is very flexible and adjustable to your needs and financial goals.

3. Affordability

You can start investing in MP2 with only Php500. Practically, all members can enroll in this program. But if you want to start with more significant capital, let’s say Php 1Million, 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 with a 5 to 10 years timeframe. It might be perfect for purposes like buying a car, 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 the capital because dividends are not guaranteed.

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

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 deciding to enroll 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 Rollover

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

3. Open new account every 5 years

After 5 years, you have to open another MP2 to rollover your investment. Though, it’s relatively easy to open an account. But 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 number, so, do I, but it’s something that we cannot take 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 how much your money would grow 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 assumed that dividends are left with Pag-ibig to earn more dividends.


Monthly (P500) TOTAL One-time (P30k) TOTAL
1 6,000 6,243.75 30,000.00 32,250
2 12,000 12,955.78 0 34,669
3 18,000 20,171.21 0 37,269
4 24,000 27,927.81 0 40,064
5 30,000 36,266.14 0 43,069

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 made 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 deposit, regular Pag-ibig, and MP2 in the last 5 years. The data comes from the BSP report and Pag-ibig financial reports.


Time Deposit

Pag-ibig (Regular)


2015 1.35% 4.83% 5.33%
2016 1.53% 6.93% 7.43%
2017 1.71% 7.61% 8.11%
2018 2.17% 6.91% 7.41%
2019 2.98% 6.73% 7.23%
Average 1.95% 6.60% 7.10%

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

READ: How to Open a BPI Savings Account

When to receive the dividends?

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

  1. If yearly, you will get your dividends every year in your bank account. After the lock-in, you will receive your capital.
  2. If, after 5 years, you will get the dividends together 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 or closure of the company, critical illness or death among family members (certified by a licensed doctor), migration, 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 2nd option, you will only receive 50% of the dividends.

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

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