10 Things You Need to Know About MP2

This year, are you thinking about how to grow your financial condition? 

Are you familiar with active and passive income? 

Or, are you one of those who are still in doubt if investing is for you?

Look no more! If you are a Filipino, residing in the Philippines, or working abroad, you have probably come across the famous MP2, but not yet. Oh, you've landed on the right blog to hear about it. Should we?

Personally, this writing is from experience, and I tried it myself. Let's talk about MP2 on a very layman's level, just like an ordinary citizen who happens to belong in the working class. 

 

1. What is MP2? 

Basically, it is a Pag-ibig Fund Saving Program. Well, is there a Filipino who doesn't know what Pag-ibig is? If there is, okay! It is a government-owned and controlled corporation under the Department of Human Settlements and Urban Development of the Philippines, responsible for the administration of the national savings program and affordable shelter financing for Filipinos. In short, if you are a member of the Pag-ibig Fund, you can apply for a housing-related loan. The Pag-IBIG II (Pag-IBIG MP2) Savings Program is a one-time, voluntary savings program with a 5-year maturity.

It is legit, folks! Your money is safe, technically speaking because the government will back you up and it's far from bankruptcy. 

2. Who is able to save in MP2?

It is designed for active Pag-IBIG Fund members who wish to save more and earn even higher dividends, in addition to their Pag-IBIG Regular Savings. See, if you are a regular member working in the Philippines, and you have a Pag-ibig account, an amount of 100 pesos has been deducted from your salary every month, and you are saving it as a member. But wait, there's more. Your employer will pay the same amount for you, so, for a month you save 200 pesos. If you are continuously paying your part, that makes you an active member. Anyway, MP2 is just an add-on saving scheme.

The program is also open to former Pag-IBIG Fund members (pensioners and retirees) with other sources of monthly income, regardless of age, and with at least 24 months of savings prior to retirement. Great, isn't it?

3. Why should I save it in MP2?

"Why should I save in MP2 when I already have my regular savings in Pag-ibig?" you may ask. Let's put it this way: how much will you get in a year if you save 200 pesos on a regular basis with your employer? You will save 2400 pesos, which is better than nothing, and you will also receive a few dividends, which is nice, right?

But, if you save in MP2, with a minimum of 500 pesos per month, that is 6,000 pesos a year! Hmm... but I can save that in my piggy bank or in a trusted bank of mine. What is the difference, you might ask? If you save it at home, your 6000 will remain 6000 for the whole year. In a bank, your 6000 might get 7.5 pesos for a year considering the rate of 0.125% time deposit.

However, with MP2 having 6.12% for 2021, you will get 367.20 in a year, which is not bad, though you will still look at it as a small amount. Go back and read number 2, it says there that there is a lock-in period for this saving and that is 5 years. If you save consistently for 5 years, you will have this scenario with the same 6.12%, let's say.

Year 1-P6,000.00 (367.20)

Year 2-P12, 0000.00 (734.40)

Year 3-P18, 000.00 (1,101.60)

Year 4-P 24,000.00 (1,488.80)

Year 5- P 30,000.00 (1,836.00)

A total of 5,508.00 pesos as your dividend for 5 years! Just think about it. You saved 30,000 safely and you will get that additional 5,508.00 even when you are sleeping. Your money will work for you. It's just that you have to be patient for five years!

Let me tell you that this is just one way to compute MP2, and there's another way to earn more. However, it's for you to decide if this is worth it.

This is the computation for the annual payout of dividends. How much more for the 5-year payout?

4. How do I open an account in MP2?

To be honest, this is very easy. If you already have a Pag-ibig account, opening an MP2 is a no-brainer. You can do that online. Following these steps,

Click here: https://www.pagibigfund.gov.ph/ (Pag-ibig Fund website)

Look at and click on the "Program and Benefits" tab.

Under that, choose "MP2 (Modified Pag-ibig) Savings,",

On the right side of the page, you will see "MP2 Savings Enrollment.". Click it,

This will direct you to another page where you need to fill in those details asked for and be cautious about your birthdate's format. For January 24, 1988, you must write 01/24/1988."

I already have an MP2 account, so it will tell me that I have it and I wish to continue. Then it will ask you how much you desire in monthly contribution, preferred dividend payout (annually or at 5-year end), mode of payment, and source of income. 

When you click submit, it will send you a copy of your MP2 accomplished form where you can see your MP2 account number. 

Tada! You have it now!

5. How do I pay for my contribution?

If you are employed in PH, you can ask your boss to have a salary deduction for that. Coordinate with your HR. 

If you wish to do it yourself, you can go to any Pag-ibig branch near you.

Or to any Pag-ibig accredited collection partner.

Okay, I will not make it difficult. If you have Gcash on your phone, you can do it directly there. Look for the government icon, scroll until you see the Pag-ibig icon, then provide the information. Pay! Gcash will charge you 5 pesos for every transaction. Fab!

6. How to check if my payment has been posted?

You need to create a virtual Pag-ibig account. Just go to the Pag-ibig website.

Then, click "Virtual Pag-ibig,"

Click "For Members."

You will be taken to a new page, where you will click "Create Account."

Well, it is a no-brainer as long as you know how to read. Now, here's the thing: once you accomplished this part, you need to wait for them to approve your account creation. Make sure that you provide the correct mobile number and email address that you are using because they will inform you once approved. It will take 1-2 weeks, roughly.

7. Can I remit more than 500 pesos each month?

Yes, you can! That is great news here! 500 pesos is your minimum contribution, but you can put in up to 1,000,000 pesos! However, if you wish to contribute 500,000 up, you need to issue a personal or manager's check. The more you contribute, the higher the dividend you will get. Let's compute... having a 6.12% rate,

Year 1- 500,000.00 (30,600.00)

Year 2 - 500,000.00 (61,200.00)

Year 3- 500,000.00 (91,800.00)

Year 4- 500,000.00 (122,400.00)

Year 5- 500,000.00 (153,000.00)

459, 000.00 ..a few thousand away for half a million pesos!!! 

This also applies: the more the merrier!

8. Why am I earning this? Where does Pag-ibig use my money?

Simple. The institution is using your money to invest in housing finance. It may also use the member's money in securities and corporate bonds. You, as the one who owns the money, trusted them to use it to generate income. By that, they will earn and they will give you a part of your share... so ideal!

9. When does Pag-ibig pay my dividend?

The corporation will distribute dividends annually, though it might reflect on your account around February to April. If you choose an annual pay-out, they will send that to your bank. If you have chosen a 5-year payout, you can take it after the lock-in period.

10. What will happen if I cannot continue paying the monthly contribution? Can I withdraw my money at anytime?

Pre-termination or withdrawal prior to maturity shall be allowed under any of the following circumstances, 

• total disability or insanity

• separation from service by reason of health.

• The death of an immediate family member

• retirement

• A permanent departure from the country

• distressed due to unemployment.

• member's or immediate family members' critical illness

• The repatriation of an OFW

• other meritorious ground as may be approved by the board

If, you still pursue withdrawing your money for any given reason, you will only get 50% of your dividend as a penalty.

 

So, there you have it! I hope these things you need to know about MP2 are helpful for you to decide now, yes now! 

If you have the means and are still employed, take that as a golden opportunity to save and earn more. 

Make your money work for you. 

5 years seems so long before you reap what you sow, but, mind you, it will surely pass that quickly if you are busy working your way to financial freedom. 

 

The earlier you start, the better!

 

 References: https://www.pagibigfund.gov.ph/