Say Pag-IBIG, and we automatically think love or...home loan. But the Home Development Mutual Fund actually offers options like growing your money. In fact, it has what is called the Modified Pag-IBIG 2 (MP2) Savings Program, which you can treat as a savings account but with higher returns.
Glaiza Manzano, a mom from our Facebook group Smart Parenting Village, learned about the MP2 Savings Program in 2019 through an officemate. She decided to apply in January 2020 because she wanted to raise additional funds for her son's education, who is a year old. She preferred the government program because it was secure and offered high returns. It also encouraged her to save — she was not touching her money for at least five years.
What is the Pag-IBIG's MP2 Savings Program
MP2 Savings Program is a five-year savings and investment program, which boasts of higher dividend profits. While it is a voluntary savings platform, it is different from the Pag-IBIG Fund Regular Savings, which is where the monthly contributions of Php100 of employees and self-employed individuals go.
In 2018, Pag-IBIG's dividend rate reached 8.11% — its highest so far and higher than any savings bank account interest rate. Plus, it doesn't hurt that you get all your earnings tax-free.
You can choose to receive your profits yearly or after five years. If left unclaimed after five years, it will continue to earn dividends based on the regular Pag-IBIG Savings Program’s rates for two more years.
Who are qualified to apply for an MP2 Savings Program
Anyone who is an active PAG-Ibig fund member and has been paying monthly contributions for 24 months can open an MP2 Savings Account. Former Pag-IBIG Fund members with other sources of income and pensioners with at least 24 monthly savings before retirement are also qualified to open and MP2 Savings account.
If you are not a member of Pag-IBIG, you can apply to be a voluntary paying member and register online. If you are an inactive member, start paying for your monthly contributions again or opt to shell out a lump sum equivalent to 24 monthly contributions to qualify to apply for the MP2 Savings Account Program.
What are the requirements to apply for MP2 Savings Program
You need to fill out and submit the Modified Pag-IBIG II Enrollment Form (MP2EF, HQP-PFF-226) in the nearest Pag-IBIG branch near you. Bring a valid identification card, and the passbook or ATM card of your nominated bank, where you want to receive your dividends or earnings.
The minimum amount you need to open an MP2 Savings Account is at least Php500. There is no limit to how much you want to save — the higher the amount you save, the more money it will earn. You can also opt for a one-time savings of a higher amount of, say, Php1 million.
How to remit from the MP2 Savings Program
Apart from doing it over-the-counter at the nearest Pag-IBIG branch, you can do it via salary deduction, upon agreement and arrangement with your employer.
Pag-IBIG also has accredited collections partners, such as PayMaya, Globe G-Cash, ECPay in 7-11 outlets, Moneygment Mobile App by Cashpinas, Coins.ph by CIS Bayad Centers, online banking and overseas remittance.
How do you save and earn through the MP2 Savings Program
Pag-IBIG uses mutual funds to grow their money. It invests at least 70% of its investible funds in housing finance, which is its primary purpose. (This is why it’s known for providing housing loans.) Pag-IBIG also uses its Short Term Loan (STL) Programs and also invests in government securities, time deposits, and corporate bonds.
The money you put in your MP2 Savings account is government-guaranteed, but how much it will earn may vary depending on Pag-IBIG’s fund performance. But it's performing well in the recent few years.
If you set aside the minimum amount of Php500 each month, you can end up saving Php30,000 in five years. This money will earn a total of around Php5,700 of dividends in five years. If you opt to receive your earnings at the end of five years (the money you earn through dividends is added to your total savings), you will end up with about nearly Php6,300 earnings (based on an annual 7.5% dividend rate).
Remember, that's just a sample computation for the minimum amount you can save monthly in your MP2 Savings Program, and the dividend rate may vary. Still, it's not bad for a secure, short-term investment. You can also open more than one Pag-IBIG MP2 Savings account, or open another one when your first MP2 Savings Account matures after five years.
Can you terminate your MP2 Savings Program before its five-year maturity?
You can look at your MP2 Savings as a backup to your emergency fund, one which you hope you wouldn't need. Ideally, you shouldn't terminate your MP2 Savings account until after five years.
Pag-IBIG may allow you to terminate and withdraw your MP2 Savings account but only for special circumstances such as loss of employment due to health reasons or closure of the company, critical illness of the account holder or his immediate family member as certified by a licensed physician, or death of the member or of any of his immediate family, among others. This is still subject to the approval of Pag-IBIG.
If you wish to pre-terminate and withdraw your MP2 Savings before its five-year maturity, you will receive only half of your dividends or just get your savings back without its earnings.
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