PAG-IBIG MP2 Absolute Beginner’s Guide

how to invest in pag-ibig mp2

TL;DR – PAG-IBIG MP2 is a voluntary, government-backed, and tax-free investment opportunity for Filipinos where you can earn through dividends and can start investing for as low as P500.


There are a lot of investment instruments that are available for every Filipino. There are the usual kinds, like stocks and bonds, mutual funds and UITFs, REITs, real estate, FOREX, VULs, high-interest savings, and many more.

But one investment offers the advantage of being government-backed and tax-free upon withdrawal.

The investment I want to highlight today is the Modified PAG-IBIG Savings II, also known as PAG-IBIG MP2 or PAGIBIG MP2 or PAG IBIG MP2 Savings or any other versions.

Through its innate qualities, It has become one of the best medium to long-term investments in the Philippines.

Let us learn more about the PAG IBIG MP2 requirements and how to invest in it.

Related: Philippine Stock Market Beginner’s Guide

What is PAG-IBIG MP2?

Modified PAG-IBIG Savings II, or MP2, is a voluntary savings program the agency offers for its active members.

This financial instrument is designed to supplement the regular PAG-IBIG savings, which are deducted every month from your paychecks if employed.

Similar to the mandatory savings through monthly contributions, it also earns dividends. However, MP2 earns 0.5% higher compared to the dividend earnings from the regular PAG-IBIG Savings fund.

How will you earn through this investment?

According to the PAG-IBIG Fund page, 70% of the annual net income of the fund is distributed proportionally to its members. So, as long as people take out PAG-IBIG loans and contribute to MP2, the investment product will continue to provide above-average returns.

If you look at the historical dividend earnings of the fund, you’ll notice that it offers a much higher earning potential than just leaving your money in the bank.

Historically, the dividend yields of the fund averaged 6.16% in the last ten years and 6.97% in the previous five, which are way higher than the less-than-1% interest offered by traditional banks.

The fund earned its highest dividend yield in 10 years in 2017 with 8.11%, and has not paid a dividend yield lower than 5% since 2014 (7 years ago).

Though the yields may be historically high, remember that the dividend yields presented are only based on historical data and, as always, do not guarantee the same dividend rates in the future, so be careful when investing.

How is it different from other investment products?

There are several advantages MP2 has to offer compared to other investment products. Here are some.

Government-guaranteed – it means that the financial instrument is almost secured and will be honored by the financial institution, in this case, the Philippine government.

Tax-free dividends – unlike stock dividends with 10% withholding tax, MP2 dividends are tax-free. This will ensure that you will gain a relatively higher amount from your dividend earnings.

Low starting capital – you start investing for as low as P500.

Higher Dividend Rate than PAG IBIG Regular Savings – the fund is a 0.5% higher dividend rate than the regular savings. In the past five years, the dividends are hovering around 7%.

Low risk – it is almost risk-free because the government offers it. So, this fund will fail only if the country or the agency fails. Just a reminder that while MP2 is low-risk, the rate of dividends will change from year-to-year.

Who can invest in PAG-IBIG MP2?

The first requirement for anyone who wants to invest is to be active PAG IBIG Fund Members. This means that you should have a PAG-IBIG Member ID (MID) and have contributed at least once in the last six months.

It is also open for former members, including retirees and pensioners with other sources of income, regardless of age, with at least 24 monthly savings before retirement.

Natural-born Filipinos are also welcome to save in MP2, provided they have saved for at least 24 months before migrating to another country.

OFWs with PAG-IBIG MID can also invest through MP2.

How to invest in PAG-IBIG MP2

The convenient way to apply for a PAG-IBIG MP2 Savings account is through the Virtual PAG-IBIG Website or by submitting an accomplished MP2 Enrollment Form to any PAG-IBIG branch.

You can start saving once your MP2 Savings Account Number is issued. You can also create as many accounts as you can. Doing this can allow you to allocate the purpose of your savings like a goal jar.

How much do I need to start?

The minimum MP2 savings is P500 per remittance. Still, you’ll have the option of a one-time (lump sum) remittance with a 5-year maturity, or you may opt for the monthly remittance.

You can then re-apply your MP2 savings account after the 5-year maturity period. This way, you will continuously grow your money through compounding.

There is also no limit on how much you’ll save, but you must diversify your portfolio.

Where can I pay or top up my MP2 Account?

There are several ways how to top up your MP2 Account. There is a salary deduction for employees, online channels like GCash and Maya, and over-the-counter remittances.

To view your savings, you can check it online through the Virtual Pag-ibig Portal.

How can I claim my investments?

After the maturity period of your savings, you can opt to credit your investment in your enrolled savings or checking account or PAG-IBIG accredited banks.

To claim MP2 Savings with the 5-year maturity, click here.

To claim MP2 Savings over-the-counter, click here.

Final Thought

As I’ve already shared in my previous posts, past performance does not guarantee future results. The investment product we’ve discussed is only a means to an end.

So, don’t forget to attach your investments to specific goals and not just for the sake of investing.

Happy investing!


PS: This post is a collaboration with my girlfriend. ;D

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