Do you want to have savings but you don’t have enough money for the minimum deposit to open a savings account in a bank? Don’t worry, PAG-IBIG got your back!
Through the MP2 Savings Program of PAG-IBIG, you can finally achieve your mantra: Work to earn, earn to save, Save to grow, grow to thrive!
So, how does it work?
What is MP2 Savings?
The MP2 Savings Program of PAG-IBIG is a voluntary contribution—this is a separate contribution from the one deducted from your salary. Because it is voluntary, you have the power to decide how you want to remit your savings: you can either ask your company’s HR to deduct your chosen amount from your salary every cut off, or you can remit your savings directly to PAG-IBIG on your own. The great thing about MP2 savings is that when life gets challenging and your priorities shift, you can temporarily pause your contributions, while your profit share continues to grow. And when you’re ready to contribute again—anytime within five years from the year you opened your account—you can simply open an MP2 savings account and your savings will continue to grow without any penalties.
For the first-time hired, PAG-IBIG is one of the mandatory government contributions that you will see on your payslip. It is an acronym that stands for Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno.
Just a little background about PAG-IBIG, it is a government-owned and controlled corporation that provides housing loans, savings, and other financial services to Filipino workers. True to its name, you will get a lot of benefits once you become a member. Aside from salary and housing loans, it also offers opening a savings account to make you financially ready in the future—one of the best ways is to open an MP2 savings account.
How to open an MP2 Savings Account?
To open an MP2 savings account in PAG-IBIG, you must be a member of Pag-IBIG first. In case you are not yet a member, now is the best time to register and start your savings journey. Don’t worry if you are not a full-time employee; PAG-IBIG membership is also open to freelancers, out-of-school youth, and other workers as well.
For those who are not yet members, here are the steps to register:
- First step: Visit the official Pag-IBIG Fund website at www.pagibigfund.gov.ph.
- Second step: Go to the “e-Services” section and select “Virtual Pag-IBIG for Membership.”
- Third step: Click on “Be a Member” and then select “Register.”
- Fourth step: Fill out the required personal information such as your full name, birthdate, and other details.
- Fifth step: Submit your registration.
- Sixth step: You will receive a Registration Tracking Number (RTN) via SMS or email.
- Seventh step: After 2 working days, you can verify and get your permanent Pag-IBIG Membership Identification (MID) number online.
Your MID number is your lifetime number and allows you to make contributions and apply for various Pag-IBIG benefits such as savings.
Just a reminder that if you open an MP2 savings account as a voluntary member, you can contribute with a minimum of 100 pesos and a maximum of 400 pesos.
Now that you are registered, here’s the real deal, you can now enroll your account to a MP2 Savings. But before doing so, here are some important details you should know.
➺ The minimum amount you can deposit is 500 pesos. It is up to you how much you want to deposit per month in your savings.
➺ Depending on your ability to fund your savings, you can choose whether to deposit per month or a one-time deposit called lumpsum. Whichever you choose, your dividend will still grow yearly.
➺ Every year your MP2 saving earns a dividend. To get a clearer idea, a dividend is the profit you earned in your savings per year.Percentage dividend earnings fluctuate based on several key factors tied to the fund’s financial performance and legal framework. Another good thing about this is your savings account earnings is tax-free specifically from 20% Withholding tax and Capital Gains Tax. As a matter of fact, because MP2 savings is government backed, the dividends you will receive here is typically much higher than the regular PAG-IBIG savings (the mandatory government contribution) or regular savings in the bank.
➺ Additionally, you can choose whether you want to withdraw your dividend yearly or let it rack up until five years.
➺ The maturity of your savings account is set at five (5) years. After that, you can decide whether to open an MP2 savings account again or not for another five years.
Through this link (https://mp2savingscalculator.com/#google_vignette) you can check how much dividend you will earn for your chosen deposit amount.
Now, here are the steps to open an MP2 savings account, here are the steps:
- First step: Log in to your Virtual Pag-IBIG account and select the option to open an MP2 Savings Account.
- Second step: Complete the MP2 Enrollment form by providing your Pag-IBIG MID number, personal details, and specify your preferred monthly contribution amount.
- Third step: Choose how you want to receive dividends and your payment mode (e.g., over-the-counter, salary deduction, or other means).
- Fourth step: Submit your enrollment application online or visit a Pag-IBIG branch to enroll manually.
- Fifth step: Make your first contribution as instructed.
- Sixth step: After enrollment, you will receive your MP2 account number for your records.
- Seventh step: For ease of access and management, Virtual Pag-IBIG is the recommended platform to open and monitor your MP2 savings account.
How to withdraw your MP2 Savings?
After your MP2 savings mature at five years, you need to submit a claim application to withdraw the funds. The maturity process does not automatically transfer your MP2 savings to your PAG-IBIG loyalty card. You must initiate the claim and submit the required documents, including valid ID and loyalty card details if you want the proceeds credited there. If you forget to claim the savings after maturity, your funds will continue to earn dividends for two more years, but only at the regular Pag-IBIG savings dividend rate, which is lower than the MP2 rate. After this two-year period, if you still haven’t claimed the funds, dividend earnings will stop, and your savings will be reclassified as “payable accounts” or “withdrawable funds.” The funds will remain yours but are no longer considered active savings. You can still claim these withdrawable funds at any time by submitting a claim application, or even choose to open an MP2 savings account again to continue growing your money.
Here is the link to claim your MP2 savings: https://www.pagibigfundservices.com/virtualpagibig/BenefitClaimsReminder.aspx?reason=A00773C6E2F65AEA
Why Do You Need to Save Money?
Saving money isn’t just a choice—it’s a must! Did you know that 59 percent, or six out of 10 Filipinos, feel stressed about money? It’s actually the biggest worry on their minds. A recent study by AIA Philippines, a well-known insurance company, found that the high cost of healthcare is a major reason why many Filipinos hesitate to seek medical help. Melissa Henson, AIA’s chief marketing officer, explained that this financial pressure really takes a toll on people’s physical and mental health.
To avoid money stress and feel more at ease, it’s important to start saving—even if it’s just a little bit at a time. One great way is to open an MP2 savings account. Here are some more reasons why saving money matters.
Emergency Funds
No one knows what tomorrow will bring nor what the distant future holds. But to be ready, savings like the MP2 of PAG-IBIG can put your mind at ease during emergencies. When you need some backup, you can withdraw your MP2 funds in critical situations, such as retrenchment, medical emergencies—particularly in cancer treatment, surgery, or dialysis—death, overseas migration, and permanent disability. Just be sure to prepare the necessary documents as proof when applying for emergency withdrawal.
Just a heads up, if you are thinking about withdrawing your savings early for non-emergency, such as education expenses, home renovation, business investments, or vacation funding, PAG-IBIG won’t approve it. These withdrawals are only allowed after the standard 5-year maturity period and may incur penalties. For emergency withdrawals, penalties are minimal, and there are no penalties for death claims.
Avoiding Debt
As the proverb says “The borrower is the slave of a lender.” Having savings can prevent you from taking loans from a bank or loan agency when you need money the most, such as for an emergency, or when you want to purchase something expensive, or you want to travel . Saving can give you financial freedom and security to afford the lifestyle you want and to not be buried in debt.
As of this writing, the Singaporean-based fintech firm Roshi Pte Ltd reported that the credit card debt in the Philippines is now at a “critical” risk level, which means a borrower owes four times higher than its monthly income. With that status of high debt-to-income ratio, the company said that many vulnerable Filipinos are experiencing “severe financial stress.”
If you would choose between borrowing or saving when you want to purchase something, you need to ask yourself, if you really need that item or how much will it cost you in the long run. It’s usually a good idea to save money first and let your interest or dividends grow before spending on things like gadgets or travel. But if you need to buy a house, a car, or require immediate cash for house repairs, PAG-IBIG offers affordable loan options. Their multi-purpose loan and housing loan programs come with some of the lowest interest rates around, making them a helpful option for members needing financial assistance.
PAG-IBIG’s multi-purpose loan has a low monthly interest rate of about 1.45%, and members can borrow up to 90% of their total savings with flexible repayment terms. Housing loans have promo interest rates as low as 5.75% to 6.25% for fixed periods, which are competitive compared to commercial banks.
This makes PAG-IBIG a practical choice if you need cash quickly for essential expenses or bigger purchases like a home or car.
Retirement Preparation
Savings are not only setting aside cash for rainy days— it can also be your pass to a worry-free fulfilling retirement. Did you know that according to the Banko Sentral ng Pilipinas a staggering 80% of Filipinos aged 60 and above have no retirement fund? And even if you have a pension , Bangko Sentral ng Pilipinas Governor Benjamin Diokno said “Depending on the lifestyle you would like to have in your senior years, this pension may or may not be enough to meet all your needs.”
So, to be not part of the statistics, having a consistent savings can help you subsidize your needs and enjoy a relaxing retirement while having a financial ability to help your family even if you are no longer working. And even if you don’t have a pension, the compound interest of your savings will grow, which means the interest from your initial deposit will grow over time, earning interest on top of interest. The earlier you start, the bigger your savings becomes, securing your retirement chapter against whatever life throws your way, from unexpected emergencies to global crises like pandemics–one practical way to begin is to open an MP2 savings account.
Help Others
Having savings is important because it gives you a safety net to help others when they need it. When you have some money set aside, you can lend a hand without worrying about your own bills. It lets you act quickly if a friend or family member faces an emergency. Plus, savings let you support causes or people in a way that lasts over time. In the end, saving money doesn’t just help you—it gives you the power to make a real difference for others.
Apply Now at Lahat Jobs
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