Pag-IBIG MP2 Savings: Rates and Returns

MP2 is a Pag-IBIG savings program with a 5-year term, open to active Pag-IBIG members. Pag-IBIG declares a dividend rate for MP2 each year, and those declared rates are the one thing on this page that is an official figure rather than a projection.

Five things Pag-IBIG states about MP2 on its own MP2 page:

• The minimum is ₱500 per remittance.
• The term is 5 years.
• Dividends are tax-free.
• The savings are government guaranteed.
• It is open to active members. Pag-IBIG counts you as active if you have at least one contribution in the last 6 months.

The dividend rates Pag-IBIG has declared

These are the official declared MP2 dividend rates, taken from the Pag-IBIG MP2 page. They are not projections. They are what Pag-IBIG actually paid.

Two things are worth reading out of that table before you look at any peso amount. First, the rate is declared after the year it applies to, so when you put money in you do not yet know what it will earn. Second, the rate moves. The lowest of the five is 6.00% and the highest is 7.12%, a spread of 1.12 percentage points. Four of the five declarations sit in a tight band from 7.03% to 7.12%, and the outlier is 6.00% in 2021.

That is why every projection below is shown across the full range of declared rates instead of just the newest one. If you plan around 6.00% you are planning around the worst of the last five years.

How the numbers below are worked out, and what they are not

The rates above are official. Everything from here down is arithmetic done on those rates by this site, not a quotation from Pag-IBIG. Three limits you should know before you use any of it:

1. The crediting method is a model, not a sourced rule. This site credits a full year of the rate on the balance carried in from earlier years, and half a year of the rate on the money you put in during the current year, because monthly savings sit for about six months on average rather than a full 12 months. Pag-IBIG’s actual MP2 crediting mechanics have not been confirmed for this project. If Pag-IBIG credits differently, the totals move.
2. The rate is assumed to hold for the whole term. It will not. Pag-IBIG declares a fresh rate every year, so a 5-year run will use 5 different rates that nobody knows in advance.
3. These are not quotations. Pag-IBIG’s own computation governs. Use these figures to decide whether ₱500 or ₱5,000 a month is worth it to you, not to plan a payment you are committed to.

You can run your own amounts through the same arithmetic on the MP2 savings calculator.

What ₱500 to ₱10,000 a month adds up to in 5 years

Each column is the same monthly saving projected at one of the five declared rates. The second column is what you actually put in, with no dividend at all.

At the ₱500 minimum you are looking at ₱30,000 of your own money over the 5 years, and a projected ₱34,837 to ₱35,818 back depending on the rate. At ₱10,000 a month it is ₱600,000 in and a projected ₱696,745 to ₱716,369 out.

How much of the maturity value is dividend

Same rows, but showing only the dividend part. This is the figure to compare against what a bank time deposit would pay you on the same money.

Across every row the dividend lands between about a sixth and a fifth of what you contributed over the 5 years. At ₱2,000 a month and 7.12%, the ₱23,274 dividend is 19.4% of the ₱120,000 you put in. That is the whole term, not per year.

Year by year: ₱2,000 a month at 7.12%

The single-line totals hide how slowly the dividend builds at the start. In year 1 the balance is small, so the dividend is small. By year 5 the balance is doing most of the work.

The year 5 dividend of ₱8,725 is more than ten times the ₱854 credited in year 1, on the same ₱2,000 a month. Over the full term that is ₱120,000 contributed, ₱23,274 in dividends and ₱143,274 at maturity.

This is also why pulling out early costs more than the months you skipped. Most of the dividend in this projection is earned in the last two years, ₱6,550 in year 4 and ₱8,725 in year 5, which together are ₱15,275 of the ₱23,274 total.

Saving past the 5-year term

MP2 matures at 5 years. If you keep saving ₱2,000 a month through further terms at the same 7.12%, the shape of the projection changes sharply, because the dividend starts earning dividends.

One more assumption sits behind the 10, 15 and 20-year rows below: that the balance from each matured term rolls straight into the next one and keeps earning, instead of being paid out and stopping. That is this site’s assumption and it has not been confirmed with Pag-IBIG.

Doubling the term from 5 years to 10 years doubles what you contribute, from ₱120,000 to ₱240,000, but multiplies the dividend by more than four, from ₱23,274 to ₱105,352. At 20 years the projected ₱552,369 in dividends is larger than the ₱480,000 you put in.

Treat the 20-year line with the most caution of anything on this page. It compounds a single assumed rate over 20 years, and Pag-IBIG will declare 20 different rates in that time.

What one percentage point of rate is worth

The difference between the worst declared rate, 6.00%, and the best, 7.12%, on a 5-year term:

At ₱500 a month the whole rate swing is worth ₱981 over 5 years. At ₱10,000 a month it is ₱19,624. In other words, how much you save each month matters far more than which year’s rate you happen to catch. ₱1,000 a month at the worst rate of 6.00% projects to ₱69,674, well ahead of ₱500 a month at the best rate of 7.12%, which projects to ₱35,818.

Where this fits with the rest of Pag-IBIG

MP2 is savings, not borrowing. If you are weighing MP2 against paying down a Pag-IBIG home loan faster, compare the projected MP2 dividend here against the interest rates on the Pag-IBIG housing loan, which run from 6.500% to 9.750% depending on the repricing period. Interest you avoid at 9.750% is worth more than a dividend you earn at 7.12%.

Other pages that may help:

• All Pag-IBIG guides
• Calculators
• How figures on this site are sourced