After figuring out the why and how-to save on Modified Pag-IBIG II program of Pag-IBIG, I started saving on MP2 while working overseas. I am happy and proud to say that the entire process were done online.
The MP2 is an easy way for OFWs to save from abroad apart from the monthly contribution to Pag-IBIG as a member. Since I consider MP2 as a great way to save, it might suits your financial goal but before applying for MP2, let’s do a quick brush up of the program and its benefits.
What is Modified Pag-IBIG II (MP2) Program
Here’s a definition of term straight from Pag-IBIG:
The Modified Pag-IBIG II (MP2) Program is an additional and voluntary five (5) year savings facility being offered by HDMF to its Pag-IBIG I members that will provide them with a yield higher than their Pag-IBIG I membership.
I don’t want you to confuse MP2 with being a Pag-IBIG member. MP2 is entirely for saving money with added bonus through flexible dividend rate. While if you become a Pag-IBIG member, you can apply for a housing loan and save for retirement through the monthly contribution.
Buying a house and saving for retirement are two of my goals. Wouldn’t it be nice to save more without all the risk and volatility of stocks and other assets?
That’s where the Modified Pag-IBIG II Program comes in.
Who are Qualified
The active members of Pag-IBIG
and with a monthly salary of more than Php 5,000.00 can apply for the MP2 program. Applicants include OFW Pag-IBIG members.
Former Pag-IBIG Fund members with source of monthly income (eg. pensioners and retirees) and have at least 24 monthly savings while a member are also qualified.
Why Should You Save on MP2 Program?
By now, I think you have made up your mind to sign up for the program because it’s an easy investment for five years. After that it’s up to you to invest it for another five years or withdraw. (Then go for a cruise if that is meant to be the travel fund.)
You can have a look for more information about MP2:
The minimum contribution is Php 500.00 per month. Increase it to Php 1000.00 the next month or skip the next contribution. Or pay once for the entire year. It’s all up to you.
You can save as much as you want in MP2.
Here’s a table to give you an idea of how much your savings can earn at 5.5% and 7.43% annual dividend rate.
Whatever amount you want to save, make it happen. Put the money in the bank. (I mean in your MP2 account.)
Here’s more information while having a good laugh from Wealth Arki.
The hosts are Rienzie Biolena and Fitz Villafuerte, who is my favourite pinoy personal finance blogger. Because I no longer watch TV (it’s not an uncommon habit for OFW), I have time to watch and learn for free. Recommend your favourite personal finance YouTubers and I’ll add it on my subscription.
How to Enroll and Pay in the Modified Pag-IBIG II
You can sign up online through the MP2 Enrollment System or download the enrollment form. After the online registration, you’ll have an MP2 Account Number. Print and take the registration form to the Pag-IBIG branch to start remitting.
For OFWs, you can register online and ask your relatives to pay on your behalf. Or pay through the Overseas Remittance Partners Abroad using the MP2 Account Number:
- Philippine National Bank (PNB)
- Asia United Bank (AUB)
- I-Express Remit Mo Sa Pag-IBIG
- I-Text Mo Sa Pag-IBIG
- I-Remit Ventaja (including PayPilipinas)
Because I’m a huge fan of online transaction, I pay online the MP2 contribution:
- PayPilipinas. It’s not the best option that I tried once but I’ll stick to it for now.
- Online Payment Facility on Pag-IBIG’s website. This is a tip from a reader. Choose Modified Pag-IBIG 2 under Program Type. It has 1.75% convenience fee.
Update: To be able to pay for MP2 as an OFW, I asked my sibling to go to a nearest Pag-IBIG branch. Because Php 500.00 is the minimum contribution per month, I decided to make a one-time contribution of Php 6,000.00. Next time I’ll pay online using the Online Payment Facility.
If I would have extra cash before the end of the year then I’ll deposit more; otherwise, I’m glad I made a contribution. Let’s see how much is the dividend.
When Can You Withdraw the Savings
The maturity date is every 5 years. You have the option of continuing the MP2 membership for another 5 years to let the savings compound or withdraw the total savings.
Note: If the savings was not withdrawn after 5 years, the dividend rate that will be applied is the same as in the Pag-IBIG I which is lower than the flexible dividend rate of MP2. After two years, the savings will stop earning dividends.
Within that period, you can only withdraw the money in any of the following events:
- Total disability or insanity
- Job loss due to sickness
The best thing to do is not to invest the money in MP2 that you’ll need in less than five years.
Within this period, the savings is safe from any impulse buying of latest gadget or airfare ticket that is ridiculously cheap making it insane to let it pass. (The future me we’ll be happy if I ignore it in the present.)
Get Your MP2 Dividends Every Year
This is a great news. MP2 dividends can be credited to a Philippine savings or checking account:
- Land Bank of the Philippines (LBP)
- Development Bank of the Philippines (DBP)
- Other accredited banks
For the members who don’t have a Philippine bank account, they can receive the MP2 dividends through check.
How to Check the MP2 Contribution
After saying the good things about MP2, I hate to say that it comes with a flaw. You cannot check the online record of MP2 membership unlike the Pag-IBIG contribution.
Regardless of how you pay, the only proof of payment is the receipt. Keep it somewhere safe. It may come in handy should there be any issues of withdrawing the savings at the maturity date.
Another option is to request a copy of record in the Pag-IBIG office or through email. Without a choice, I did the latter and waited two months to get the Employee’s Statement of Accumulated Value (ESAV) for Modified Pag-IBIG II.
I’m glad to get my dividends for Pag-IBIG membership but where’s the dividends for MP2?
This made me think of whether should I invest more in MP2 Program. But I’m certain that I’ll continue paying my Pag-IBIG contribution to avail house repair loan.
How Much Dividends Can You Gain
This is the grey area for me. Fortunately, Rodel shared his experience of inquiring about the dividend on his SOA. So here’s the computation.
Contribution: Php 10,000 from July to December 2017
Total Contribution in 2017: Php 60,000
Dividend Rate in 2017: 8.11%
Dividend: Php 1,400
Total Contribution Each Month
July = Php 10,000
August = Php 20,000
September = Php 30,000
October = Php 40,000
November = Php 50,000
December = Php 60,000
Computation: Php 10,000 + Php 20,000 + Php 30,000 + Php 40,000 + Php 50,000 + Php 60,000 = Php 210,000 / 12 months = Php 17,500 x 0.0811 (dividend rate of 8.11%) = Php 1,419.25
Do you have the same computation in your statement?
With this information you can assess how much or little your savings will grow in MP2 without any risk involve.
The Modified Pag-IBIG II is a simple way to save for Filipinos especially for those who work in the Philippines. As for OFWs, remitting might take some of your time but working abroad means higher contribution and earnings within 5 years.
Wherever you are, find out if MP2 is the right saving strategy. This could take up 10% or more of an investment portfolio; consider your age, return of investment, and risk tolerance.
What I’m interested to know if someone already withdraw their MP2 savings. If that’s you, share the journey in the comment.
Will you save through MP2? If not what other ways of saving or investing are you considering.
Because curiosity lead to more discoveries although at some might it might have killed a cat. I’m adding the questions that are yet to be answered by you. Who knows. Maybe in the not so distant future we’ll get the enlightenment, someday.
- After 5 years (maturity), is it possible to get the savings and leave the dividends for it to keep on compounding?
- Is it possible for the HR to deduct the MP2 contribution as well, similar to Pag-IBIG I?
- What is the maximum contribution per year?
Finally it’s the end of the post . . . for now. Keep on learning and investing.