Four Pag-ibig MP2 strategies you need to know

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In a separate article on Pagibig-MP2, a discussion on the many benefits of the program included its tax-free income, guaranteed capital, dividend options, and small starting capital for as low as P500.

In a separate article, I’ve discussed how you can make the most out of your Pag-ibig MP2 earnings so that your net benefits can be maximized. You can check it out and then come back here. It is also worth noting MP2 historical return since 2010.

Here, the discussion is extended to include MP2 strategies. Included too are financial goals and situations where they might be appropriate to be used.

Related: Passive income through Pag-ibig MP2: How to start saving
How to make the most of Pag-ibig MP2 earnings

Strategy 1: Compounded MP2

Do you have any medium-term financial goals? A medium-term goal is to be fulfilled in three to five years.

It may require an amount that you may not be able to put up presently, and by postponing it later in the future would give you more time to save up. These goals can be any of the following:

  • Important milestones such as weddings, anniversaries, reunions, etc.
  • Leisure such as vacations abroad
  • Purchase or down-payment for a property or vehicle
  • Capital for a business or franchise
  • Child education
  • Professional development like taking student exchange or post-graduate studies

Any number of investment options are suitable for these goals such as bonds, money market, time deposit products, savings account, long term negotiable certificate of deposit and balanced funds.

You might have to think twice going into the more aggressive equities and index funds because of the relatively short length of time. Experts recommend that equities require at least a decade to ride through the ups and downs of the stock market.

Pag-ibig MP2 is particularly suited for these goals too because its maturity is 5 years. If you let the dividends compound at the end of the maturity, the more that you get out of your savings.

How the compounded MP2 strategy works

  • Save monthly, yearly or one-time.
  • Let the savings stay in MP2 to mature.
  • Withdraw at the end of the 5-years.
  • Reap the benefits of compound interest!

See below a table showing estimated growth of P500 and P1,000 monthly savings, respectively.

MP2 savings estimate of P500 monthly. Credit: Pag-ibig.
MP2 savings estimate of P1,000 monthly. Credit Pagibig.

Strategy 2: Dividend pay-out

But what if you need to withdraw the dividend at the end of each year? There are a couple of situations where you might need an extra annual income.

  • Expenses for yearly trips
  • Payment for annual fees such as club membership, homeowners association, etc.
  • End-of-the-year purchases such as gifts, house decoration and repairs, etc.
  • Birthdays and other family celebrations
  • Donation to charity, church, etc.
  • A supplement to your annual retirement fund.

This is where the dividend pay-out strategy comes in. Pag-ibig allows you to receive your dividends either at the end of 5 years or each year. This flexibility allows you to be able to enjoy your earnings as they are credited to your account.

How the dividend pay-out works?

  • Start your MP2 savings.
  • When opening the account, indicate that you’d like to get your dividend yearly.
  • Enroll a bank account to where your dividend will be credited.
  • Receive your annual dividend.
  • Withdraw your capital upon maturity.
  • Or you can rinse and repeat.

See below a sample annual dividend pay-out for a one-time savings of P1 million.

Dividends from one-time P1 million savings. Credit: Pag-ibig.

Strategy 3: Tiered MP2

As you can see from the table above, you can actually get the dividends per year. However, there are situations where you might want bigger returns than what the dividends can offer such as:

  • child education
  • tuition and matriculation fees for your post-graduate or professional education
  • mortgage and other big expenses

The tiered MP2 strategy makes use of the fact that you are allowed to open multiple MP2 savings account.

How the tiered MP2 strategy works

  • Open one MP2 savings account each year for the next four (or more) years.
  • Start saving P500 monthly on the first year, P1,000 monthly on the second year, P1,500 on the third year, and so on.
  • On Year 5, you can withdraw the first MP2 savings.
  • On Year 6, you can withdraw the second MP2 savings, and so on…
  • You can also do yearly or one-time savings.

See below a sample estimate of your earnings and income starting Year 5 and so on if you save at least P500 monthly.

Your total savings would be ₱150,000 and at the end of the fifth year, your first Pag-IBIG MP2 account would mature and give you ₱36,266. Your four other accounts would also mature in each succeeding year respectively, giving you a total of ₱181,331.

And if we compute your total dividend, that is going to be ₱31,331 (181,331 – 150,000), which is a cumulative growth of 20.89%.

YEARSavings1ST MP22ND MP23RD MP24TH MP25th MP2
624,000 36,26627,92820,17112,956
718,000  36,26627,92820,171
812,000   36,26627,928
96,000    36,266

And this table shows growth of your funds if you save P1,000 monthly and that is an annual total of ₱12,000. At the end of five years, your entire savings would be ₱300,000. With the dividends and adding all the earnings from MP2, you get ₱362,661.

648,000 72,53255,85640,34225,912
736,000  72,53255,85640,342
824,000   72,53255,856
912,000    72,532

Disadvantage of tiered MP2 strategy

One possible disadvantage of the tiered MP2 strategy is the fact that you would need to increase your savings by twice the amount each succeeding year. The relief begins on Year 5 as you would have one less account to save up for.

Strategy 4: MP2 rollover

Can Pag-ibig MP2 be used for long-term investing? Apparently, yes.

Before discussing about the strategy it is worth repeating two things. One, MP2 matures at the end of 5 years. Two, if you don’t withdraw your money, the dividend you’re going to get would be the same as Pag-ibig mandatory savings, which is relatively lower than what MP2 is offering.

So with the MP2 rollover strategy, the goal is to keep your savings in the program and let it grow as long as you want. One of the benefits of this strategy is the potential for compound earnings longer than 5 years.

How MP2 rollover strategy works

  • Open an MP2 account.
  • Save monthly, yearly or one-time.
  • At the end of 5 years, withdraw your money.
  • Open another MP2 account.
  • Put your savings back to the new MP2 account.
  • Rinse and repeat.

The only downside is that there are reports it might take quite a while before you can get back your money, some lasting for months. For the time being that you’re unable to withdraw, that can be a missed opportunity of earning passive income for your savings.

Also, some people might find it inconvenient to keep closing and opening accounts every five years. To date, an option for automatic rollover is not yet available to the investing public.

Here is a projection using the average dividend rate from 2010 to 2018 for one-time capital of ₱1,000,000. This estimate tracks the growth of the account for nine years. The total dividend will be ₱663,362.

As a reminder, past returns do not guarantee future and actual performance. For a full discussion, you can check this article on MP2 earnings since 2010.

11,000,000 58,167 1,058,167
261,550 1,119,717
365,130 1,184,847
468,919 1,253,765
572,927 1,326,693
677,169 1,403,862
781,658 1,485,520
886,408 1,571,928
991,434 1,663,362
Total1,000,000 663,362 1,663,362


  • There are four MP2 strategies: compounding, annual dividend pay-out, tiered MP2 and MP2 rollover.
  • Pick the strategy that best suits your financial goal.
  • MP2 has maturity of 5 years, making them suitable for medium-term goals and for reaping the benefit of compound interest.
  • In annual dividend pay-out, you can withdraw the dividend each year for extra income.
  • In tiered MP2 strategy, you may open and save up for one MP2 account each for the next four (or more) years. You then withdraw from each account upon maturity starting on Year 5.
  • In MP2 rollover, you can keep your savings for as long as you want by closing an account upon maturity and transferring them over to a new one.


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73 thoughts on “Four Pag-ibig MP2 strategies you need to know”

  1. Hi,

    Thank you for sharing the above information. It’s a great help for those who just started on their Pag-Ibig MP2. However, I would like to know your opinion on tiered MP2 and MP2 rollover, which is better of the two?

    Thanks in advance!

    1. Hi Joy, thank you for dropping by. I would say go with a strategy that fits your situation. Tiered MP2 means that you would need to open a new account every year, so it might be good if your financial goal occurs some time in the future and requires money for several years. An example is college tuition for a child. You’re redeeming one MP2 savings for each year to pay for the school fees.

      The MP2 rollover is extending the program long-term. Because MP2 has lock-in period of five years and does not automatically renew, then you may wait at the end of 5 years, close the account, open a new one, and reinvest everything back to the new account. Goals such as retirement or acquiring real estate assets may come to mind.

  2. Hi, this is such a good post. I find it very helpful for persons who are interested in government guaranteed investments like pag ibig MP2. One question though, If i increase my monthly investment in MP2, will it reduce the withholding tax that will be deducted to my monthly salary ? As we all know MP2 are tax free and is not included in computation of taxable income.

    “Section 12. Pag-IBIG Contributions are Excluded from the Computation of the Gross Income. Pursuant to Section 32 (B) (7) (f) of the National Internal Revenue Code of 1997, as amended, Pag-IBIG Contributions are excluded from the computation of the gross income and shall be exempt from taxation.”

    1. Hi there, I am not familiar with our laws when it comes to income tax so please do consider my reply with a grain of salt. The way I understand it, Pag-ibig MP2 is a voluntary savings program, and that could mean that whatever amount you saved is from your after-tax income, unlike the mandatory Pag-ibig contribution. Secondly, the tax benefit of MP2 is on its earnings. Unlike when you get dividends from stock (10% tax) or interest from time deposit (20% tax), earnings from MP2 are tax-free. I hope this answers your question.

      1. Hi Pesolab. Wanted to jump in and say that what you said is right. But, addressing the legal provision raised by the commenter, that refers only to the regular PAGIBIG (or what PAGIBIG employees refer to as P1) contribution which is pegged at 100 pesos on the part of the employee. That is excluded in the gross income of the employee thus very relevant in the computation of the latter’s income tax. As it is too short to discuss here, the formula is this:

        EXEMPTIONS (ex: 13th month pay; SSS, GSIS, Philhealth, and Pag-ibig Contributions)

  3. Hi, ask ko lng po sir if nag start po ako ng monthly contribution for the 1st year pwede po bang sa 2nd yr.up to last year maging yearly na po ung contribution q. And pano po ung magiging computation doon? Salamat po.

    1. Hi, L.A. You may save into your MP2 account however you may want. As for your second question, Pag-IBIG hasn’t revealed their calculation although using compound interest an estimate can actually be made. While this may not be the space to talk about the math, suffice it to say that the dividends are proportionate to the length of time your contribution is kept. This means the amount you put at the start of the year earns higher dividend than the amount you put in halfway through the year. And the amount contributed on the first year compounds more than the amount invested in the second, third, or succeeding year.

  4. Hello thank you for this interesting post. Just wanted to clarify paano mo po nacompute yung sa tierred strategy, P6000 naging P6244? Ano po exact computations doon at P12k naging P12,488?

    1. Hi, Arlene. These figures are taken from the screenshots grabbed from Pag-ibig, as you can see from the images above. They can also be approximated using annuities.

  5. For tiered strategy, how small would the savings be if the 2nd, 3rd and 4th accounts save the same amount?

    1. Hi, Mack. Can you please specify the question? The tables above are for P500 and P1k monthly savings, respectively.

  6. Hi,

    Say for instance, i opened two MP2 accounts with PHP30k each account, is strategy 1 most beneficial for this case?


    1. Hi, Jed. If these two accounts are to be used at the end of 5 years, then let it compound for that long would suit you. Again, the choice is really up to you on what best fit your needs.

  7. Do you know if there is cut off of the dividend payout? Example, the dividend rate for 2020 is 7%. But this will be based on 7% of accumulated amount from January to Sept of 2020.
    Reason why I’m asking is that on the illustration above on the 1 time payment vs monthly payment, a one time payment may lead to a 7.5% of return (75K dividend at 1M one time deposit) versus 4% on cumulative payment (see 487.50 for accumulated 12K but at 1K per month from Jan to Dec).

    1. Hi, Karina. The dividend reflects the number of months the capital is committed to the fund and it is credited once a year. So if there is a one-time savings of a million pesos from January to September, it’s not going to receive the entire 7% or whatever rate Pagibig gives. Instead, the dividend is credited only for that 9 months, which would be 52,500. Similar principle applies on the monthly savings.

      Please bear in mind that MP2 matures in 5 years. Full dividend may not be issued if account is closed before that, as in the example above. Lastly, these are all estimates and actual results vary.

  8. Hi! I was wondering what is the difference if I take the tiered MP2 strategy in mind but instead of increasing incrementally the amount I put year on year, I instead put the same amount year on year.

    Example: 1st year 100k, 2nd year 100k… and so on, instead of 1st year 100k, 2nd year 200k and so on. What’s the purpose of putting in increasing amount in Tiered MP2?

    Thank you for your great explanation by the way!

    1. Hi, Bea. The tiered strategy is actually what you described: the same annual amount for one account. The difference is that you open one additional account in each succeeding year. By the time the first account matures, you can start redeeming your savings in each year until all accounts are withdrawn. The purpose of opening multiple accounts (one more per year) is to have an “annual” windfall from MP2 which you can use for any yearly needs such as child’s education, pension, etc.

  9. Hi it’s me again.

    On another matter I would like to know if given the current market (we’ve experienced some decline due to COVID right) is MP2 still a good investment vehicle to consider? How do you forecast interest rates to be this 2020? Thank you again!

    1. Hi, Bea. Sure, don’t worry. Keep the questions coming. You may have already read elsewhere that the general outlook of the economy is low because of the lockdown. We’re still halfway through the year, and it is still to be seen what effects the pandemic has on the MP2 dividends.

      1. Thanks for your replies! Your articles are very helpful to me. I’ll continue to be an avid reader. More power to you!

  10. what would you recommend in terms of higher dividend earnings open one mp2 account or wo open two or more mp2 account? Thanks.

    1. Hi, Amor. The dividends are the same regardless of the number of accounts. But if you’re deciding whether to save monthly, yearly, or lump sum, using math lump sum nets the most compounding. You may check this article on how to make the most out of MP2.

  11. Hi,pesolab would like to ask if need ba na actuve ang pagibig account mo to be able to make an MP2 account?

    1. Hi, Mj. The requirements are that you need to have the mandatory membership and at least 24 months of contribution.

  12. Due to Covid-19 pandemic, can Pag ibig allow us to withdraw half of our investment in MP2, allowing us to use such on our daily needs?

    1. Hi, Lynne. You may inquire at the branch. The available info indicates you can withdraw even before the maturity. Bear in mind that dividend may not be paid out.

  13. Very nice read. I would like to ask if it is possible to have multiple payments for the same period (month). Example, I fund my MP2 account through salary deduction. This is done for me monthly. In case I have money leftover, Is it possible to put additional funds to my account through payment partners like GCASH? Thank you very much.

  14. just want to know to real net income from your divided in real value of the money can we consider deduction from inflation rate every year

  15. What will happen if my MP2 matures on April, 2020 can I withdraw it on December, 2020 instead for higher payout after maturity on the same year?

    1. Hi. You can. Bear in mind that after 5th year, your account will only earn whatever rate the regular savings program gives and no longer the higher MP2 rate. If the account is still not closed two years after maturity, it wouldn’t earn anything.

  16. Can I have the annual dividend/interest payout strategy on MP2 but still have the free will to add additional savings to it via GCash for better payout (Higher Capital) at the end of the year?

    1. Hi, Rea.
      1. The risk of the business or entity getting liquidated is present in all investments.
      2. However, such risk in Pag-ibig MP2 savings is addressed by the fact that it is government-guaranteed. So the next logical question would be, how likely is it for the government to go bankrupt when it is in turned backed up by Filipino taxpayers?
      3. Investors decide what level of risk they are willing to take.

  17. Hi! What if I don’t have bank enrolled on my Pag-Ibig and couldn’t claim the annual divided payout, will it add to my saving? Thank you!

    1. Hi Angelica. During registration, you were given the choice to receive annual dividend or at the end of the five years. You may check online account or at the branch just to be sure.

  18. Good day! I would like to ask, OFW po kc ako what if nag mature na ung mp2 ko pero hindi ako makauwi ng pinas para i withdraw at i renew ung mp2 ko personally? Pwede po bang mg utos nlng ako sa ibang person n i withdraw at mg renew? Thank you.

    1. Hi Maria. The info available states that you need to drop by the branch to withdraw your savings. Please consider reaching out to Pag-ibig to see if they allow your authorized representative to initiate redemption of your money on your behalf.

  19. Hi pesolab, thanks for such an informative article and for taking the time to respond to our queries. I’ve been wanting to try investing in MP2 but got a little worried on the part where I need to have 24 months of savings first before qualifying. I Stopped contributing several years ago, can I contribute in advance for the 24 months savings (1 full payment) to qualify for MP2. Thanks in advance 🙂

    1. Hi Ann.

      1. Thanks for the kind words.
      2. Please consider dropping by Pag-ibig office to check your total number of months of contribution. They can also see whether you can open an MP2 account.

      More power.

  20. Hello Pesolab! My first time to read your article. I will definitely follow your other article. Is there a way for me to regularly receive new articles from you?
    Additionally, is it possible to apply for another MP2 account through online?

  21. Pwde ba Hindi monthly ang hulog? p1500 kasi monthly gusto ko hulog kaso malayo kami sa city so minsan yun hulog para sa 3 buwan (jan-mar)=₱4500 hinulog ko na ngayon buwan January lahat then naghuhulog ulit ako sa April ng another ₱4500. Pwde ba yun ganon? Sa halip na Monthly ₱1500 ang ihulog? Parang nagiging quarterly yun hulog ko.

  22. Hello. Just wanna ask. Pano po gawin yung tiered mp2? Coz one of the staff told me I can only open 2 accounts under mp2.

    1. Hi. Well, then either the staff or Pag-ibig website is wrong. According to the FAQ posted by Pag-ibig, “Can I open more than one (1) MP2 Savings Account? Yes. You are allowed to open and maintain multiple MP2 Savings Accounts.”

  23. Hi! If I skipped my monthly payment for a year and then pay it whole after, what will be the implications on my savings?

    1. Hi Lin. Dividends would be earned the moment you saved. Those missed months would remain to be missed opportunity to earn passive income.

  24. Hello po! Yung sakin po is I skipped one month of my savings. Bale po kasi by Feb po ako nakapagregister. Pwede ko pa bo bang habulin at magsave para sa January?

    Thank you po.

  25. Good day po pesolab. My friend po kasi ako green card holder po sa US, pero may mp2 savings account po sya dito sa Pinas,ask ko po if need nya ireport sa IRS sa US yung sa mp2 savings nya dito?

  26. Hi Pesolab,

    My question is on withdrawing the funds before the 5 year maturity. My siblings and I are planning on setting-up an emergency fund for our parents. But I thought of putting it somewhere where it gains or at least hedges the inflation. As per their website, it’s allowed in some cases including someone getting sick etc. Not sure if you have or anyone here has experienced the same, how was the process of withdrawing and possibly how long would the process take to withdraw before maturity. Thank you in advance.

    1. Hi Mymy. An emergency fund is best put into a financial vehicle where you can get the money any time. While MP2 historically posted high dividends, it may not suit the purpose you have in mind because of the lock-in period and, according to some reports, turn-around time when withdrawing your funds.

      Nonetheless, when the account is preterminated, those who choose to get their dividend at the end of 5 years will only get 50% of the dividend. If annual dividend pay out was selected, then only the total amount is given back. Source: MP2 info from Philippine Embassy Singapore

  27. Hi Peso Lab,
    Good day.

    Ask ko lang po kc i pay may MP2 online gcash. Instead ang period ko is 3/1/2021 – 12/31/2021 ang nangyari is 3/1/2021 – 12/31/2020. When i check my online accoutn MP2 d siya pumasok. Anu po ba next step ko pwede gawin? thanks

  28. Greetings! I’m interested on this passive income through MP2 Program and would just like to ask about your MP2 Rollover strategy. Does that mean that after I closed my first account, I can put it all into a second one with the same monthly savings?

    Thanks in advance and I love your articles by the way.

    1. Hi Jeh. You can open multiple accounts, so nothing is stopping you from opening a new account after the current one matures. And you can put in whatever amount for as long as it is at least the minimum ₱500.

      1. Hi!
        When I register my account I chose 1000 per month, however in my payment I paid already the whole year which is 12,000. Now my question is what is the basis of dividends computation? Hope you can help me. Thanks

  29. Hi! I would like to ask po if I can continue to save for my MP2 Savings even Dec 2019 pa yung huling hulog ko and currently unemployed ako (so walang hulog ung contribution ko since 2019)?

  30. Good day! As sample po if nag start po ako mag open nung feb. at naglagay po ako ng 500, next month march naglagay po ulit ako ng 500. Pwede po ba na sa May ko na hulugan yung April ko? Wala naman po kayang magiging problem? Thank you po.

    1. Good afternoon sir. I’ve been regularly contributing for the last 3,5years for MP2 . Since I still have less than 2years of maturity , I want plan to invest my retirement and roll over for tiered MP2 after 5years . Is this a good decision.? Thank you .

  31. Hi,

    Is it possible to invest a lump sum for the first month then additional monthly savings until maturity? Or it’s strictly either one-time investment or monthly investment only?

  32. Hi po,

    Patulong naman po. I started last yr in Oct po. Then in Dec po I have saved 40k for my MP2 account. I checked my dividends po for 2020: 280 pesos. Thinking that last year’s dividend rate was 12,6% how come that I only got 280 pesos as dividends po for that yr? Pano po ung computation nila? Thanks po in advance for your help.

    1. Hi Liza,

      Prorated ang calculation ng dividends. The earlier month you invest, the higher the dividend rate po.

  33. ano yung better payout kung kunyari may 100k ka na, ilump sum ko nalang ba or better pa rin na istart small and build up ko using the tiered mp2?

    during registration kapag sinabi kong “receive dividend after 5 years”, papayag ba silang ipachange to annual dividend? or pwede bang annual dividend pero may year na pagnakuha mo dividend, ibalik mo nalang sa mp2? (thinking of flexibility po)


  34. Let’s say nag pasok ako ng 100k at year 2020 then for the next 4 years yearly ako maghulog ng 100k, ang tanung ko po pwede ba sabay sabay or i mean minsanan na siang iwithdraw sa maturity date nia, or yung first na contribution ko lang which was made year 2020? then next year ang pwede lang iwithdraw ay yung 2021 and so on

  35. Hi Peso lab,

    I tick the box for 1 time na big amount na contribution sa mp2, but the following year i decided to add another contribution, kasi planning na yearly mag lagay ako ng malalaki , does this affect my maturity date? or yung masusunod parin ay yung maturity date ng nauna,
    and ang tanung ko once na reach ko na ang maturity date pwede ba i withdraw na lahat or ang pwede lang iwithdraw is yung year 1? and so on?

  36. what happen if I miss the monthly contribution? for example I forgot to contribute this month then double my contribution in november? Thank you

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