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As a voluntary savings program, the Pag-IBIG MP2 provides its members with competitive interest rates and dividend payments. Over time, the program has gained popularity due to its high returns. However, the dividend payout varies each year and depends on factors such as the program’s financial performance and market conditions. Find out more about the Pag-IBIG MP2 Dividend Rate and improve your financial situation by saving money!
Table of contents
What is Pag-IBIG MP2?
Understanding Pag-IBIG MP2’s dividend rate is important before discussing how it operates. For members of the Home Development Mutual Fund, the Pag-IBIG Multi-Purpose Loan Program 2 (MP2) is a long-term savings plan (HDMF). Members get a 5% yearly return on their assets. They can take out the money as dividends or reinvest for more profit.
The Benefits of Investing in Pag-IBIG MP2
One of the primary advantages of investing in the Pag-IBIG MP2 is its high interest rate of 5%. This rate surpasses that of typical savings accounts. This feature makes it a desirable investment opportunity for individuals seeking better returns.
Additionally, participants in this program are qualified to receive dividend payments once a year. This implies they won’t have to wait too long to get extra money.
Also Read: GUIDE: PAG-IBIG Online Registration
The Dividend Rate of Pag-IBIG MP2
The current dividend rate of the Pag-IBIG MP2 in 2023 is 6.0%.
Check out the past dividend rates from 2011 to 2021 below:
| 2021 | 6.00% |
| 2020 | 6.12% |
| 2019 | 7.23% |
| 2018 | 7.41% |
| 2017 | 8.11% |
| 2016 | 7.43% |
| 2015 | 5.34% |
| 2014 | 4.69% |
| 2013 | 4.58% |
| 2012 | 4.67% |
| 2011 | 4.63% |
The Pag-IBIG Fund’s Board of Trustees decides the dividend rate, commonly known as the interest rate, for the Pag-IBIG MP2 program depending on the fund’s performance. It’s crucial to check the current interest rate before investing because it may fluctuate occasionally. Although the interest rate for the MP2 program was higher than the regular savings program offered by the Pag-IBIG Fund, it is essential to note that the interest rates for both programs may fluctuate over time.
Pag-IBIG Fund designed the MP2 program as a savings program for long-term use, not for short-term investments. When making investment decisions, it’s important to consider more than just the interest rate. When evaluating whether a program aligns with your financial goals, consider seeking advice from a financial advisor
How is the MP2 Dividend Rate Calculated?
The Pag-IBIG Fund calculates the MP2 dividend rate based on its earned investment income. The formula for calculating the MP2 dividend rate is as follows:
MP2 dividend rate = Total investment income earned by the Pag-IBIG Fund / Total MP2 savings for the year
The total investment income earned by the Pag-IBIG Fund includes various sources of income, such as interest earned from loans and investments, rental income from real estate properties, and other forms of investment income. The total MP2 savings for the year refers to the aggregate amount of savings made by all MP2 savers for a particular year.
Also Read: How to create Virtual Pag-IBIG account: Step-by-step Guide
When Will You Receive Your MP2 Savings Dividends?
You can choose to receive your MP2 Savings Dividends via the following options:
- Upon full withdrawal of your MP2 Savings after its 5-year maturity period with your MP2 Savings Dividends compounded annually;
- Through annual payout with your MP2 Savings Dividends credited to your savings or checking account enrolled in any of Pag-IBIG Fund’s accredited banks;
- The Pag-IBIG Fund will release the MP2 Savings Dividends to overseas members or those without a Philippine bank account via a check if they opt for an annual dividend payout.
Consequences of Not Claiming Your MP2 Savings After Maturity
The Pag-IBIG Fund will transfer your MP2 savings to its unclaimed dividends account if you do not claim them after maturity. The unclaimed dividends will continue to earn dividends, but you will no longer have the right to claim them. After your MP2 savings mature, claim them promptly to maximize your investment benefits.
Withdrawing MP2 Savings Before Maturity: What You Need to Know
You may pre-terminate and withdraw your MP2 Savings prior to its 5-year maturity based on the following reasons:
Active Pag-IBIG members
- Total disability or insanity
- Termination from employment due to health reasons
- Retirement
- Permanent migration to another country
- Unemployment due to layoff or company closure
- OFW repatriation from the host country
- Death of the MP2 account holder, with the MP2 Savings to be received by the member’s beneficiaries
- Critical illness of the MP2 account holder or an immediate family member, certified by a licensed physician, and subject to approval by Pag-IBIG Fund.
Retirees and/or Pensioners
- Total disability or insanity
- Death of the MP2 account holder, with the MP2 Savings to be received by the member’s beneficiaries
- Critical illness of the MP2 account holder or an immediate family member, certified by a licensed physician, and subject to approval by Pag-IBIG Fund.
- Other meritorious grounds may be approved by the Pag-IBIG Fund Board of Trustees
Members with compounded dividend payout on their MP2 Savings
- Principal MP2 Savings;
- 50% of the total dividends earned from prior years; and
- 50% of the dividends for the current year, which shall be released after the dividends for the said year have been declared and credited.
MP2 Savings with annual dividend payouts
- Principal MP2 Savings, with 50% of the total dividends received from prior years to be deducted from proceeds; and
- 50% of the dividends for the current year, which shall be released after the dividends for the said year have been declared and credited.
Final Thoughts
The MP2 dividend rate offers an attractive opportunity for Pag-IBIG Fund members to earn higher returns on their savings. By taking advantage of this program, members can enjoy the benefits of a government-backed investment with guaranteed tax-free dividends.
However, it is important to consider your financial goals and risk tolerance before investing in MP2 savings. When investing, it’s crucial to do thorough research and seek advice from a financial advisor. This helps you make informed decisions aligned with your financial goals.
Frequently Asked Questions (FAQs)
If you plan on opening an MP2 account, here are answers to frequently asked questions to help you get started:
How much is the MP2 monthly contribution?
Members are required to contribute a minimum of PHP500 from their salary. If they want to raise their contribution, they can do so for up to a maximum of PHP25,000.
What happens after 5 years of MP2?
After 5 years, MP2 savings reach maturity and become free to be claimed by the member at any time.
How much can I earn in Pag-IBIG MP2 savings?
Members can earn as much as 7.03% of their savings per year. –WhatALife!/Jayve
Keep Reading: GUIDE: Pag-IBIG Contribution Table 2023
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