The Modified Pag-IBIG II (MP2) is an optional investment program for current and former Pag-IBIG Fund members in addition to the regular Pag-IBIG savings.
Here are the reasons why you should start with MP2 as soon as you can as Overseas Filipino Workers (OFWs):
Grow your money while doing nothing at all
If you were conducting a business endeavor, you do not only put your money on it, but it also requires your time, energy, much thoughts and decision-making, risks, and other things that might give you headaches.
With MP2, you put your money in the program, wait, and literally do nothing while your money grows with less or no risk at all.
Interests grow too
Aside from the dividend that is added to your principal each year, the interest itself is included in the computation of the dividend for the next year; and this continues until its maturity.
As an example, if your principal is Php50,000 at the beginning of the year, after 12 months, your money would be Php53,000 (50,000 x 6%). This means that your earning is Php3,000 in one year alone without doing anything. In the second year, your fund would be 56,180 (53,000 x 6%). As you notice, at the beginning of the second year, your interest earns too aside from the principal amount. This is the reason why you should go for one big amount at the beginning of your MP2 program if your budget allows it.
Budget-friendly savings program
You only need a minimum of Php500 for every remittance. Setting aside Php500 for MP2 should not hurt your monthly budget. After all, it will be yours again after its maturity, and with added gains.
Also, there is no penalty if you missed a contribution for certain months, although it is not recommended as it negates the purpose of gaining more.
No cap limit to the amount you can save
You can put in as much money as your budget allows, there is no cap limit to that. Whether it’s Php500 for this month or Php100,000 in half a year, it does not matter. The thing is that you do not stop putting money into your savings. Save as much as you can, you will never regret it.
Others are doing a one-time lump sum amount for the whole five-year period at the beginning of the program. It gives more gain than with the regular frequency of payment as explained above. However, for a one-time remittance exceeding Php500,000 a personal or manager’s check is required.
Convenient online transactions
This is important for us, OFWs. You can open MP2 and pay remittances on the Internet, the Virtual Pag-IBIG website allows you to do this.
To pay online with your remittances, you may do a wire transfer with your Philippine-based bank account powered by Visa, Mastercard, or JCB. You may also use GCash. PayMaya, Moneygment App via Cashpinas, and Coins.ph via Bayad.
If you can use any of these apps wherever you are on this globe, then you should start saving now. You may still ask your relatives in the Philippines to do the transactions for you, but doing it all online at your fingertips is so convenient and with added privacy.
Highest annual dividend rate
Dividend rate is the financial ratio showing how much Pag-IBIG pays out its members out of its profits. Remember that your money is not staying idle in Pag-IBIG. They use it for various purposes for profit. Because you “lend” them your money, you have a share of whatever earnings it may acquire.
Pag-IBIG is giving higher returns on members’ savings compared to other common investment vehicles such as bank accounts and time deposits. As of 2022, Pag-IBIG MP2 annual interest rate is 6% while the regular Pag-IBIG savings is 5.5%.
The highest annual dividend rate Pag-IBIG gave its members was in 2017 reaching up to 8.11%.
The government will not get a share of your savings gains. You will receive your MP2 dividends without any tax deductions whether it is yearly or after five years.
One-year or five-year maturity period
Many people have no patience in waiting for ten long years or until their retirement comes to finally get a taste of their accumulated earnings. If this is your case then MP2 is your best option if you want to put your money into a working asset.
MP2 is ideal for medium-term investment goals as your savings will mature after five years if you opted for it upon registration, only then you can withdraw your money together with its compounded interests. Nevertheless, you may start again after your savings ended upon maturity.
It is generally recommended to put part of the withdrawn money back to MP2 for another five years of investment. Make savings a habit. If five years is still too long for you, Pag-ibig also offers a one-year lock-in period for your money.
Multiple MP2 savings accounts
You are allowed to open as many MP2 accounts as you would like. Some people do this if they have different goals for each savings such as for tuition fund, emergencies, travel, or retirement. Others are using another account for family members who are not members of Pag-IBIG yet.
Companies may come and go, but a government will strive to stay for generations. For so long as the Philippine government exists you won’t lose your principal in Pag-IBIG. It is assured by law.
If you are an OFW, chances are you are already a member of the Pag-IBIG fund, then you are eligible to have the optional MP2 savings program. Make it a habit to do monthly financial budgeting, and include MP2 savings into it.
Pag-IBIG MP2 investment program is risk-free, budget-friendly, allows your money to accumulate more, and is so convenient to do. You should start doing MP2 now. Thank yourself after five years for the decision you make now.