How to Invest in Pag-IBIG MP2 Program (Earn Passive Income)

Here is the gist of this post. If you want PASSIVE INCOME but are afraid to put your money in riskier investments then read up!

Wouldn’t it be nice to save more without all the risk and volatility of stocks and other assets? This is where the Pag-IBIG MP2 Program comes in.

**Note: After knowing the basics through this post, head over to this next post where we’ll learn 4 tips to make the most out of investing in MP2:

Pag-ibig MP2: 4 TIPs to make the most out of it

What is the Modified Pag-IBIG MP2 Program?

Here’s a definition straight from Pag-IBIG:

The MP2 Savings Program is a voluntary savings program for members who wish to save more and earn higher dividends than the regular Pag-IBIG Savings Program. In other words, it’s an easy investment for 5 years which we can consider as a low-risk investment but with better-earning potential. After 5 years, it’s up to you to invest it for another five years or withdraw.

Compare that to medium-risk and high-risk investments that recommend you to place your money for 6-10 years to actually see the returns. Pag-ibig MP2 is also open for OFWs.

Regular Pag-IBIG contributions or Pag-IBIG MP2?Which is better?

Now don’t get confused with the two, alright? Knowing which is better will depend on your goal.

  • Want to grow your savings faster? Put your money in the Pag-ibig MP2. It has higher dividend rates than the regular Pag-IBIG savings program

According to Business world in 2018, dividend rates were at 6.91% for regular Pag-IBIG savings program, while 7.41% for the Modified Pag-IBIG 2 (MP2) savings program, a special savings mechanism offered to members and retirees.

  • Planning to apply for a Pag-IBIG housing loan? Upgrade your monthly contribution in Pag-IBIG savings program which is where your monthly contribution goes. Your higher monthly contributions will help you qualify for a higher loan amount.

Do you have both goals in mind? Certainly, it is doable! If you can afford to set more savings from your income, you can increase your Pag-ibig contribution AND save under the Pag-ibig MP2 at the same time. Why choose only one when you can do both?

Pag-IBIG MP2 versus Time Deposits

Below is a comparison of Pag-ibig MP2 annual dividend rates versus Time Deposits average rates offered by banks:

2015 2016 2017 2018
Pag-ibig MP25.33%7.43%8.11%7.41%
Time Deposits3.20%3.11%2.98%3.45%

Source: Esquire

As you can see, it is clear that MP2 dividend offers more competitive dividend rates than most rates offered by banks and even corporate bonds.

7 reasons why you should invest in Pag- IBIG MP2 Program

1. Affordability & Flexibility 

The minimum investment is P500 per month. There is also no maximum amount.  You can invest in MP2 as much as you want. Moreover, you can pay monthly, quarterly, and annually.

You may skip the next contribution. Supposing you consistently contributed P1,000 per month from January to July, but on August you went a little tight on your budget. You can forego your contribution for August and resume on another month. Let’s say you received your bonus. You can resume on December and contribute P50,000 to make up for the previous months’ lapses.

You can also pay once for the entire year. It’s all up to you.

2. Your Pag-IBIG MP2 is backed up by the government

This makes MP2 suitable for a conservative investor because of its low risk meaning the chances of you losing your money is very slim to none. Probably the worst case scenario is that you would get back what you only have invested which is very unlikely. 

3. Earnings are tax-free

The dividends that you earn are exempt from tax. Tax-free means a bigger “take home” of earnings for you. This is an advantage of investing in Pag IBIG MP2 compared to term deposits that has 20% withholding tax. 

4. No limit to no. of Pag-Ibig MP2 accounts

You can open an unlimited number of Pag-IBIG MP2 accounts, with their separate account numbers for identification.

5. High Dividend rates

As mentioned above, MP2 rates have significantly higher rates than savings accounts and time deposits which makes it a better option if you are looking for an investment vehicle with higher returns and minimum capital loss.

6. Dividends can be released yearly to your bank OR remain in the account for compounded growth

More on this later.

7. No fees and charges

That’s one advantage hence your invested amount remains intact.

How does Pag-IBIG earn?

Where does Pag-ibig actually invest? Pag-ibig is a fund where people’s contributions are invested in many assets.

The Fund invests at least 70% of its investible funds in housing finance. The Fund also utilizes its funds for its Short Term Loan (STL) Programs, and also invests in government securities, time deposits and corporate bonds.

How can I receive the Pag-ibig MP2 dividends?

You can choose to receive your MP2 Dividends through two options:

  • Annually, with your MP2 Dividends credited to your savings or checking account
  • Upon its 5-year maturity, with your MP2 Dividends compounded, making you take advantage of compounding interest

Ok, so which between the 2 options is better?

Have a look at the two examples below. Supposing you are contributing P500 per month which is equivalent to P6,000 per year.

Notice the difference of the value of your dividends if you choose to have it annually paid out and after the 5-year period maturity.

MP2 div rate at 6.96% p.a, photo credits: Pag-ibig

As you can see, saving your dividends until the 5th year shows better gains than having the dividends paid out annually.  Even when in both situations, your total savings is technically the same which in the case above is P30,000.

Now that does not mean that you should set aside ‎P500 under the mattress every month and make a contribution after it reaches ‎P6,000.

Why? Your money under the mattress will just sit idle and won’t earn anything extra compared to what you could’ve earned had it been invested somewhere while it’s accumulating.

Remember that time is of the essence. If it is within your means to save ‎P500 every month, then why not put it in MP2 rather than in hiding it at home, in your piggy bank or in a bank account?

But, if you think that you would benefit more from receiving the dividend yearly- such as paying for your car’s insurance or your child’s tuition- then go ahead.

Can I re-apply for a new Pag-IBIG MP2 Savings once my MP2 Savings matures?

Yes. Once your MP2 Savings reaches its 5-year maturity, you may re-apply for a new Pag-IBIG MP2 Savings Account.

But take note of this: If you do not re-apply for another MP2 account, your Savings shall continue to earn dividends based on the regular Pag-IBIG Savings Program’s (P1) rates for two more years. After which, it shall be treated
as an accounts payable and shall no longer earn dividends.

As of this writing, there are NO AUTOMATIC rollovers here. So if you wish to continue getting the same MP2 benefits beyond five years, opening a new account is required.

After reading this “How to Invest in Pag-IBIG MP2 Program” Guide, you can head over to this post to learn 4 TIPS on how to make the most out of your Pag-IBIG MP2 investment:

Who are qualified to invest in Pag-IBIG MP2?

  • Anyone who is actively contributing to the mandatory savings is qualified (Active members og Pag-ibig). Applicants include OFW Pag-IBIG members.
  • Former members or pensioners, regardless of age, who have paid at least 24 monthly contributions before retirement.

If you’re not a Pag-IBIG member yet, you must register first and pay your monthly contributions to be considered an official member.

How can I enroll in a Pag-IBIG MP2 Program?

For walk-in: Go to any Pag-ibig branch. Bring any valid identification card, the required initial amount, and bank account where you want dividends to be credited.

For online registration:

Download the online enrollment form. Make sure though that you are already a member and have been issued a membership number.

Visit the nearest Pag-IBIG office and submit the printed copy of your MP2 enrollment form/s.

A few reminders:

  1. Bring photocopies of your valid IDs
  2. Bring at least P500 (minimum amount) because it is required that your first contribution should be paid at the branch only. Succeeding contributions can be made online.

Oh btw, shout out to PAG-IBIG Sta. Mesa branch for the quality and speedy service; and the accommodating staff. Hoping all government agencies can replicate that kind of service.

Mode of payment

Pag-ibig MP2 Savings can be through salary dedution for those employed; over-the-counter payments at any Pag-ibig Branch; and at any accredited collection partners:

  • SM Business Centers
  • SM Hypermarket
  • Savemore
  • Bayad Centers and it’s Authorized Partners
  • LandBank
  • MetroBank
  • 711 (Through EC Pay)
  • M Lhuillier
  • Cash Pinas 
  • GCash

For OFWs and people who are located abroad, you can also remit through international partners such as iRemit, via PayPilipinas, Philippine National Bank (PNB) and Asia United Bank (AUB).

However, any amount exceeding P500,000 would have to be remitted personally or through a Manager’s check.

What if I want to withdraw before the 5th year?

Yes it is allowed. Pre-termination or withdrawal of MP2 savings prior to maturity, shall be allowed under any of the following circumstances:

  1. Total disability or insanity
  2. Separation from service by reason of health
  3. Death of the member or any of his/her immediate family member
  4. Retirement
  5. Permanent departure from the country
  6. Distressed member due to unemployment limited to layoff and/or closure of company
  7. Critical illness (cancer, organ failure, heart-related illness, stroke, neuromuscular-related illness) of the member or any of his immediate family members, as certified by a licensed physician, subject to approval
  8. Repatriation of OFW member from host country
  9. Other meritorious grounds as may be approved by the Board

Pre-termination of MP2 membership for reason other than those allowed, the member shall only be entitled to the following:

  1. 50% of the total dividend earned as penalty for the pre-termination of MP2 savings of members who opted for compounded dividends; or
  2. Only contributions of members who opted for the annual dividend payout

Final Thoughts from The Thrifty Pinay

The Pag-IBIG MP2 is a simple way to save for Filipinos especially for those who seek higher dividend rates with minimum risks.

For OFWs, remitting might take some of your time but try to look at the brighter side. Working overseas may lead to higher contribution and earnings within 5 years-which is after all, for your family’s future.

Wherever you are, find out if MP2 is the right investment for you. If you have been building your investment portfolio then this might be the one you are looking for. Do remember to consider your age, return of investment, and risk tolerance.

I hope you found this “How to Invest in Pag-IBIG MP2 Program” Guide helpful. Will you open an account in MP2? If not what other ways of saving or investing are you considering? Share them in the comments below.


  • Pag-ibig Fund Programs:
  • TD and MP2 rates:
  • Pagibig profit:
  • Accredited collection partners:

By Ameena Rey-Franc

Recognized as one of the Top Finance Blogs in the PH. Ameena Rey-Franc (founder of TTP) is a former Banker and BS Accountancy graduate turned Blogger, Keynote Speaker, and entrepreneur. Currently an RFP delegate, she is also the Author of a book about Financial Resilience and has held seminars for reputable companies like GrabFoodPH, Pru Life UK, VISA, JPMorgan Chase& Co., Paypal, Fundline, Moneymax, and many more. The Thrifty Pinay's mission is to empower women to LEARN, EARN, and be FINANCIALLY-INDEPENDENT no matter what life stage they are in.