How to Maximize Earnings in Pag-ibig MP2

How to Maximize Pag-ibig MP2

Modified Pag-IBIG 2 Savings Program or Pag-big MP2 is a secured option to grow your savings. In addition, you can easily enroll in this program for only Php 500 online or by visiting a Pag-IBIG branch.

You already know the details about MP2, right? If you don’t, then you may read it first by following the link below.

RELATED: Ultimate Guide | How to Invest in Pag-IBIG MP2

So the question now is, “How can you maximize Pag-ibig MP2.”

Just a friendly warning, embrace yourself because this post contains a lot of numbers.

Is Pag-IBIG MP2 the right investment for you?

But before we dive into that, let’s revisit first the key features of MP2. Certainly, most people are drawn to it because the government offers it. Again, let me repeat, capital is backed up by Pag-IBIG, but dividends are not guaranteed.

But fret not, Pag-IBIG MP2 has posted higher dividend rates on capital compared to savings and time deposit accounts since its inception.

READ: 5 Easy Steps in Achieving Financial Freedom

Higher Dividend Rates than Banks

So here is a table that shows the dividend rate of MP2 from 2010 up to 2019. As you can see, the dividend rate remains above 7% since 2016. It even reached 8.11% in 2017, which is a significant increase compared to the previous years. Certainly, it’s something you cannot get from a bank plus it is exempted from the gains tax, which is 20% of the earnings.

Thus, you’ll get to enjoy your full earnings in MP2.


But then there is a lock-in period of 5 years which is a considerable amount of time, right? So you must be really committed when you decide to enroll in this program. However, in early redemption, you may not be able to get the full dividends that you were expecting.

How to Protect Your MP2 Savings

Thus, having an emergency fund will minimize the chances of early redemption. It is because when an emergency arises, you will have an accessible fund to meet the financial need.

But if you don’t have an emergency fund now, then, at least, start saving for it together with your MP2.

RELATED: Emergency Fund 101 | Saving for Unexpected Expenses

How to Maximize Pag-IBIG MP2?

Now that everything is refreshed let’s now proceed on how you can maximize the potential of Pag-IBIG MP2. In this blog, I would like to help you determine 3 key points.

  • To choose between monthly, yearly, or one-time investment, consider your financial goals and investment horizon.
  • Deciding whether to get dividends yearly or after five years depends on your investment strategy and financial objectives.
  • Combining different investment strategies, such as diversification, asset allocation, and risk management, can help you maximize returns and minimize risks.

3 conditions used in the comparisons

1. Minimum investment

I used the minimum investment amount per month, which is ‎₱500. If the contribution is ‎₱500 per month, then it’s equivalent to ‎₱6,000 in a year, and it is ‎₱30,000 in 5 years.

2. Average dividend rate

The average dividend rate in the last 5 years is 7.102%. I used this rate to capture the highs and lows of the dividend rate in the previous five years. Again, this is not the actual rate. It is just used to give us an idea of how our savings will grow in this program.

The return on investment is still dependent on the actual performance of the Pag-ibig fund.

3. Simple and compound interest formula

I used the compound interest formula to get the projection of earnings on most parts. And simple interest formula for the yearly dividend payout.

By the way, I decided to create a separate post for the computations. It’s too long and complicated for average investors. So I’ll just link it here once done.

RELATED: How to Compute for Pag-IBIG MP2 Dividends

Monthly, yearly, or one-time investment?

Now, let’s see which is the best option between saving monthly, yearly, or going for a one-time investment.

So here’s a simple comparison between investing regularly (monthly or yearly) and a one-time investment using a yearly dividend payout.


MONTHLY (₱500)

YEARLY (₱6,000)ONE-TIME (₱30,000)

Clearly, making a one-time investment yield the highest result. The reason behind this is that the whole capital is already invested from the start. Thus, it gets to earn the full interest each year for the next 5 years.

But not all of us can invest a considerable sum of money in one go, right? So the next best option is by saving annually. But if going for a monthly contribution is more manageable for you, then go for it.

The most important thing is you are moving toward your financial goals.

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Which is better a yearly dividend payout or compounded payout?

Now, we know that a one-time investment will yield the highest return on your money, so we’ll be using this in the next comparison. The next question you may be asking yourself is, “Which is wiser, getting the dividends yearly or after five years?” It’s important to carefully consider your investment goals and strategy before making a decision.

From the ultimate guide on Pag-ibig MP2, you have 2 options on how to receive your dividends⁠—yearly or after 5 years lock-in period.

So here is a table comparing the two, MP2 (A) is compounded while MP2 (B) represents the annual dividend payout.

2 34,413 2,13134,262
3 36,856 2,13136,393
4 39,474 2,13138,524
5 42,277 2,13140,655
Total 42,277 10,65540,655

After 5 years, MP2 (A), compounded dividend payout, has a total savings of ₱42,277. While in MP2 (B), an annual dividend payout, has only ₱40,655.

Thus, the better option is to get your money after 5 years.

To explain this, in an annual dividend payout, the capital gets to earn dividends each year. But in compounded payout, the capital earns interest, and eventually, the interest gets to earn interest in succeeding years. Thus, you’re maximizing the earning potential of MP2.

READ: 5 Strategies to Get the Most Out of Pag-IBIG MP2

What’s the verdict?

If we combine the results of the two comparisons above, the best way to maximize Pag-ibig MP2 is by one-time investment and letting it compound in 5 years.

You can use this strategy if you have the money to make a one-time investment. But then do not feel bad if you cannot do it right away.

Again, there’s nothing wrong with taking baby steps. What matters is that you are moving forward and you are doing a great deal for your future.

So what’s next?

If you opt to save monthly, after 5 years, you will get your capital, right? By then, you can probably roll over your savings by opening another MP2 account. And you may do this until you’re happy with the results.

GET NOW: Pag-IBIG MP2 Calculator | A Must-Have Tool for Investing in MP2

Let’s wrap it up!

  • MP2 is better than saving in a bank. Just remember to keep your emergency fund and some money that you’ll use in a couple of months or years in the bank. As for the rest, look for alternatives wherein you’ll get more bang for your buck.
  • So always start saving with a sustainable amount. There’s no point in saving a huge sum of money that you’ll eventually redeem within 5 years.
  • You can get security while having a better return on investment in MP2.
  • Only invest the money that you can live without. Again, 5 years is a considerable amount of time, so think before putting it in MP2.

Lastly, search for other options.

While MP2 posted higher earnings compared to a savings account and time deposits, some financial vehicles have shown better returns. So you may still consider SSS PERA, mutual fund, UITF, etc. The important thing here is to know your options well.

Happy investing 🙂


23 thoughts on “How to Maximize Earnings in Pag-ibig MP2

  1. Hi sir Frederico,
    thank you for sharing this very helpful information for mp2, I have only 1 question to ask, as of now, I have started on mp2 on monthly payment of 2000 php, can I opt for a 1 time investment before the year ends?


  2. Hi Sir, I just opened my MP2 last year and I chose 5years and monthly as terms. Is it OK if I will invest a lumpsum(one-time) payment and stop investing monthly having chosen the said terms?

  3. very helpful, na gets ko paano i-compute so pinagiisipan ko kung magkano tlga invest ko, so true sa back up savings pra hnd mareedeem agad ang MP2 in tough times. ***** 5 stars

  4. Hi Sir, I’m planning to do the one time investment. Should the period for the one time be Jan 2022-Jan 2022 or should it be Jan 2022-Dec2022? Like i should put the 12,000 just in January?

    Thank you.

  5. Hi Mr. Suan,

    Do we need to set up our pag ibig MP2 Account as Annual Payout/Compound Interest.. Or it is automatic that we do not withdraw our dividends it will be compounded ?

  6. Hi, Sir. I’m still a student and I want to open an account in MP2. However, I don’t have any bank account. Would it hinder my plan to open an account in MP2?

    1. Hi Jas. There are only 2 requirements needed i.e. you must be an active member with 24 months contribution. So the first thing you should do is to become a Pag-IBIG member first and pay the 24 months’ worth of contributions. After that, you can now open an MP2 account.

      1. Hi sir,
        in line with this, I am an ofw,and I dont have a pagibig mp1 contribution, does that mean I am not eligible for MP2? By the way, I have started to pay for MP2.

        thanks, hope you can answer my question.


  7. tama po ba yung ginawa ko?

    Yung account po kasi na ginawa ko ay for 1k monthly then nagkapera po ako tapos hinulog ko ung 40k ng isang bagsakan sa isang buwan. mamamaximize ko po ba yung tubo?

    salamat po!

  8. Hi Sir Federico,

    Is it possible to increase your monthly investment? Lets say initial investment is 500. Then for some time increase it to 1K?

    Thank you.?

  9. Hi Sir Federico,

    Can you compute for us the possibility of combining some of your tips?
    So, this is what’s in my mind:
    To invest Php500 every month then after I get the annual dividend payout, I’m going to add it on the 2nd year. Then add again the annual dividend payout to the 3rd year and so on.


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