Passive income through Pag-ibig MP2: How to start saving

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Do you know there’s a chance to earn passive income through Pag-ibig or the Home Development Mutual Fund (HDMF)? It’s called MP2 or modified Pag-ibig savings program. When MP2 was launched in 2010, it’s been posting higher and tax-free dividend compared to time deposit and savings account. And this year, the dividend rate is announced at 7.23%.

Pag-ibig MP2

Every employee has to have a contribution to Pag-ibig regular savings. It is mandatory. Whatever you’ve put in becomes the basis on how much you can loan when you’re planning to build a house or purchase real estate. It does earn some dividends.

But if you want higher dividends, MP2 is what might suit you. It is purely voluntary so actually you have to open it on top of your regular savings.

How much dividends can I earn?

Dividend rate is usually declared in March of each year. It’s published on the website and announced in the news along with the company’s financial reports. The amount can vary depending on its actual income.

Related: How to make the most out of your Pag-IBIG MP2 earnings
Four Pag-ibig MP2 strategies you need to know

Latest MP2 dividends

In March of 2019, Pag-IBIG announced its latest MP2 dividend for the previous year at 7.41%. It’s about 8.63% lower than in 2017. See below the rest of the dividends since 2010. The 2010 rate is based from the financial statement of Pag-IBIG and the rest are from the Esquire report.

YearMP2 dividend rate

Pag-ibig MP2 versus time deposit vs. regular Pag-ibig

Here’s the comparison between time deposit interest, Pag-ibig (mandatory) regular savings dividends and MP2 dividends since 2010. As you can see, it actually beats both time deposit and mandatory savings consistently every year. The table below shows the average returns until 2018. Time deposit rate is based on BSP report, while Pag-IBIG rates are culled from Pag-IBIG financial statements, Esquire, and other online sources.

YearTime depositPag-ibigMP2

How does Pag-ibig earn?

Where do they invest? Actually, Pag-ibig is a mutual fund where people’s contributions are invested in many assets. According to the law, 70% are into financing housing loans. Other sources of income are from its short term loans, sovereign securities (acquiring debts from the government), time deposits, and bonds from companies.

Are you eligible?

Anyone who is actively contributing to the mandatory savings is qualified. Exemptions have been granted to people who are no longer employed such as those who are former members with 24 monthly savings as long as they have a source of monthly income.

Benefits of Pag-ibig MP2?

These are the many advantages when you begin MP2 as source of passive income.

  • Earnings are tax-free.
  • It is guaranteed savings backed up by the government, so it’s ideal for conservative investors who want to have a safe place to invest and without capital loss.
  • There are no fees and charges, so your invested amount remains intact. It is unlike mutual funds where there are sales load.
  • Eligible members include those who are no longer actively employed but are still earning an income.
  • Dividends are historically higher than a savings account, time deposit, and the mandatory savings.
  • Dividends can be released to your bank or remain in the account to earn compounded growth.
  • Contributions are flexible. Because it is voluntary savings, you can invest however you want: monthly, quarterly, or annually. Unlike variable universal life (VUL) policy, you are not tied to a contract where you’re required to pay periodic premium.
  • The small capital requirement means that you can start even when you don’t have that much money.
  • There is no limit on how much you put up. This is perfect for those who have more to invest.
  • Account opening is easy as it’s like updating existing membership.
  • To pay is also convenient. Contributions are accepted at any branch or participating payment centers. Now, Pag-ibig has an online payment facility.
  • You can withdraw any time. Terms apply.
  • This is ideal savings vehicle for medium-term financial goals.
  • It can be a good way to diversify your portfolio and as a way to manage risks in your investments.
  • Update: You can now open an online account on the website.

Disadvantages of MP2

What are the risks associated with MP2 investing?

  • Lock-in period is set at 5 years.
  • Full dividends may not be released should withdrawal occur within the lock-in period.
  • No rollovers are available. After 5 years, your contributions would earn the same returns as the mandatory savings. Two years later, it would not earn anything.
  • If you wish to continue getting the benefits beyond five years, opening a new account is required.
  • Doing transactions may be inconvenient for those without any Pag-ibig branches nearby.
  • There is an opportunity cost when the earnings from MP2 are lower than other investment opportunities. For instance, some mutual funds and UITF funds have reported higher returns.

How can I enroll with MP2?

Drop by any Pag-ibig branch. Bring any valid identification card, the required initial amount, and bank account where you want dividends to be credited. You can actually download the online enrollment form. Make sure though that you are already a member and have been issued a membership number.

There’s also an online application here.

How much should I save?

You can start for as low as ₱500, but it’s really up to you. If you want to put up more, like maybe ₱1,000, you can.

Is there limit to how much I can save with MP2?

You can go as high as you want. There is actually no limit on how much you can invest. Bear in mind that higher amounts may mean that you need do it in ways other than personally handing in cash. If the amount is at least half a million, you may need to issue a check.

How much can I expect to earn?

Below, you will see an estimate of how much your money would grow when saving for the next five years. There are two results showing ₱500 and ₱1,000 monthly. The rate that’s being used is the average dividend rate since 2014. The rates in the past do not guarantee future returns.

Here’s a great article to read on how to make the most out of Pag-ibig MP2 earnings.

1 6,000 6,219 12,000.00 12,437.09
2 12,000 12,860 24,000.00 25,719.01
3 18,000 19,952 36,000.00 39,903.13
4 24,000 27,525 48,000.00 55,050.74
5 30,000 35,614 60,000.00 71,227.28

How often should I save?

It’s your choice how frequently you’d save for your MP2. The program accepts regular payment such as a monthly contribution that is if you prefer so. You may also opt to do it one-time. Either way, your savings can be eligible to receive the yearly dividends.

Where can I get my dividends?

There are two ways in getting your dividends: compounded or annually. In compounded, you wait until the lock-in period of 5 years. In annually, you get the dividends each year straight to your bank account.

Where can I pay my contributions?

Contributions can be deducted from your salary subject to your arrangement with employer. They may be accepted at any Pag-ibig branches or any of the participating payment centers: 7-11 stores, Bayad Centers, SM Business Centers, M. Lhuillier, and ECPay.

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

For a more complete and updated list, you may check this online resource.

Can I open more than one MP2 savings account?

Yes. Multiple accounts are permitted. It might be an option for you if you’re saving for different financial goals, and you don’t want to mix up your funds for each of them.

When can I withdraw my money?

You may withdraw your money at the end of the lock-in period, which is 5 years. Certain situations allow you to close it within 5 years such as total disability, medical-related work separation, unemployment due to business closure or retrenchment, retirement, serious illnesses, migration abroad, unexpected demise, etc.

Should you close the account before the period on grounds not covered above, there’s going to be consequences. For compounded accounts, you’re only entitled to 50% of the dividends and those in annual accounts will only get their total savings minus all dividends.

If I don’t withdraw, what happens after 5 years?

If you keep your savings with Pag-ibig beyond the lock-in period, they will no longer earn the same dividend and instead will revert to the same earnings as the mandatory regular savings. After two years, if no withdrawal is done, they don’t earn any gains anymore.

Should you wish to continue enjoying the benefits, you can open a new MP2 account again.



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52 thoughts on “Passive income through Pag-ibig MP2: How to start saving”

  1. Hello. I just enrolled for the MPII program online and would like to ask if I can already start paying for it online (GCash) or do I need to hand in my form to a Pag Ibig Office? Thank you

    1. Hi, Katrina. Good question. The first payment is to be made at the branch. Succeeding payments can be done via online and bayad centers.

  2. Hello, I want to open an account for MP2 but not or never had any account in Pag-ibig. What is the best thing to do?

    Thank you

    1. Hi, Janette. You need to have a membership first before you can open an MP2 account. Check their online registration or after the quarantine, you can visit any Pag-ibig branches.

  3. Hi. I had my MP2 Savings before and now I have a new employer. What is the process so that I can continue saving? Do I still have to sign any form?

    1. Hi, Hanna. If you’ve been paying through your employer, check with Pag-ibig as well as your company’s HR on how to continue saving through salary deduction. However, if you’ve been saving in MP2 on your own, there is no need to update your MP2 account. Just keep on saving up the same way.

  4. Hi Pesolab,

    Can I apply for MP2 via my employer? Also, what if on the 3rd year I increase my contributions, will that that extend the 5 years of earning dividend or will it still be within the 5 years earning dividends from the start of enrollment?

    1. Hi, Janus. Here are the answers to your two questions.
      1.) You may check with your employer whether you can apply through them. Some have been saving up through salary deduction, others went straight to Pag-ibig to open the account.
      2.) When you increase your savings on the 3rd year (or any year for that matter), your account would still mature within the five years. The five-year maturity of the account stays regardless if you increase or decrease your savings.

    1. Hi, Yvette. You may pay through any Pag-ibig branch, bayad centers, or online. Check their website for their payment options.

  5. Hi. Can I increase my contribution by paying online if I initially chose to pay my contribution through salary deduction?

  6. How can i recover my pag-ibig membership number..i already forgot my number though before i was working then my employer deducted me for my contribution..if i was not mistaken it was way back 2013 when i last paid my contribution

  7. Hi, I start paying MP2 even if my P1 is empty for some employer problem. Does saving/paying MP2 is legit as long as we had P1 Number and registered in MP2?

    1. Hi, Giovanni. Please consider dropping by any Pag-ibig branch for your questions. What I know is that P1 membership is necessary before opening an account for MP2.

  8. Hi! Im just a new member of pag-ibig a month ago, is it okey to pay the equivalent of 24months contribution so to qualify me to start my first contribution on my pag-ibig MP11.

      1. what if nawalan ka work within the 5 yrs period…technically wlang employer na mgfifinance ng mp1 mo..Will it affect my mp2 contributions eligibility?

  9. Hi. I tried to register online and accidentally submitted the form without realizing that the mode of payment depends on your chosen source of funds (I chose employment income instead of savings/deposits cause I thought it was asking my source of income, and when I opened the PDF of my submitted form, it has a space for my signature to allow my employer to deduct the MP2 savings from my salary).
    Can I still change it in any Pag-Ibig branch? And what MOP should I choose between OTC and Any Pag-Ibig accredited partners so I can pay through 7/11 or bayad centers in the future? Thank you.

  10. I tried to apply for MP2 online but it appears I have an existing account. Can I retrieve my account number through online?

    1. Hi, Thea. You may call or email them. The best way would be to drop by any of their offices so you can retrieve your account number.

    2. Hi po! Nag apply me ng mp2 last 2015 then 500pesos p lng ung nahulog ko, may makukuha pa po kaya me this year?

  11. These two cons can be eliminated. You can now deposit your MP2 contributions via GCash or PayMaya. You can open and register online without the need to go to any PAG-IBIG office. You will only need to go their office if you want to activate your Virtual PAG-IBIG. I registered and activated my Virtual Pag-ibig account and I can monitor my deposits in MP2 there.

    1. Hi, Jai. Thanks for this updates. Paying on the website through credit card uses PayMaya as gateway, and there are fees involved.

  12. Public school teacher po ako ng 15yrs at may kinakaltasan ng pagibig ang aking payslip eversince im working..may 100 po yung unang kaltas at 200 naman po ang additional?tanung ko lng po..iba pa po ba ito sa mp2?gusto ko po kcing magapply ng mutual funds sa inyo pagibig..pwede po b ako mag open ng sarili kong account na 1000 monthly ko bbbyaran o huhulugan sa pag-ibig thru gcash or any bayad center?kelan po ba ko pede magstart mg open ng account

  13. Hi, i am just wondering, what if i die in the middle of that 5 years (but i did one time deposit) what will happen to my money and its dividend?

    1. Hi Shalom. Whatever amount that is due to you can be requested to be released to your heirs in accordance to our estate laws.

  14. Hi, Good day. What if you only contributed for 45 months then after that you missed many months of remittance to MP2 savings ( like the remaining 15 months.)
    Second question there are months that you have not remitted like you only remitted A total of 40 month and missed 20 months?
    Thank you.

  15. Hi Persolab! I opened my MPII account a year ago, but didn’t have the chance to put money in. Now I want to fund it. My question is, is my account still active now even though I havent out in money? and if I put money now, can I do it online? Thanks.

      1. If I just started this September 2020, do I need to pay Jan 2020 to Aug 2020? Will it end on Dec 2024? or Aug 2025?

      2. Hi, this is voluntary. Just make sure that you’re able to deposit at least 500 and there is no maximum amount.

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