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3 Pag-IBIG MP2 Hacks For Advance Investors


I think most of us would agree that Pag-IBIG MP2 is a great investment. It is one of the most popular investment instruments for both OFWs and workers based in the Philippines. Its popularity is due to the fact that Pag-IBIG MP2 is guaranteed by the Philippine government and has a higher dividend rate compared to other safe investments like time deposits, retail treasury bonds, and money market funds. The MP2 is a boon to Filipinos who want their money to grow but are afraid to put their money in other, riskier investments. If you’re one of these people, this post is for you. I will show you three Pag-IBIG MP2 hacks to help you: preserve your hard-earned money, avoid paying taxes, and at the same time take advantage of the Philippine government’s guarantees and MP2’s comparatively high dividend rates.

Now before we proceed to the exciting part (it is exciting, I promise!), let’s review the basics of Pag-IBIG MP2 since understanding the rules is essential before we can use our hacks.


Pag-IBIG MP2 is a voluntary savings program that allows Pag-IBIG members to contribute and get their money back in 5 years with dividends higher than the regular Pag-IBIG program. This means you can keep your money in a safe investment vehicle within a reasonably long period with earnings higher than regular bank savings accounts and time deposits.

The information in this section is based on the Pag-IBIG MP2 official FAQ published here.

Who are the people qualified to join the program?

  • Active Pag-IBIG Fund Members (both in the Philippines and Overseas Filipinos)
  • Former Pag-IBIG members with a source of monthly income and/or Pensioners regardless of age with at least an equivalent of 24 monthly savings (I assume with Pag-IBIG)

Before you can apply to be a Pag-IBIG MP2 member, you need to be or have been, a Pag-IBIG 1 member in good standing first. Pag-IBIG 1 is the government program that allows you to save for retirement through a small monthly contribution and of course, allows you to take out housing loans if you ever need them. If you’re employed in the Philippines, you’re automatically a PAG-IBIG member.

If you’re abroad, you would need to apply to be a member first and make Pag-IBIG 1 contributions. Only then you can apply for Pag-IBIG 2. 

If you are based abroad, you can apply for your Pag-IBIG 2 membership with your Pag-IBIG Fund Services Member Services Desk. There are approximately 22 representatives in Asia-Pacific, Europe, North America, and the Middle East.

Pag-IBIG MP2 Annual Dividends

YearDividend RateInflation Rate
2010-20155.26%0.7% (2015)

To find out how lucrative Pag-IBIG MP2 is for some people, look at the table above. You can see MP2’s dividend rate since its inception compared with the inflation rate of the same year. As you can see, the dividends outstripped inflation.

Of course, we should keep in mind that past performance does not guarantee future gains. But we can still use the historical data for our projections. So far, the average dividend rate based on the available data in the past years is 7.053%.

When you compare this rate to the rate of other safe investments like bank savings accounts, time deposits, and retail treasury bonds, you can see that the Pag-IBIG MP2 rate is superior.

Personally, I think Pag-IBIG MP2 is a great way to save for our mid-term goals like:

  • Save up for your kid’s college funds
  • Use the money to start a business
  • Down payment for a house or condominium unit for your primary residence or for rent
  • Dream wedding
  • Take your family on vacation

If you’re an OFW, you should take advantage of Pag-IBIG MP2’s safety and relatively high growth. To learn more about other Philippine government programs that you can benefit from, you can read this post about the 6 Ways to maximize Philippine Government Benefits as a Pinoy Expat.


Now with the basic information out of the way, we will look into the factors that we can exploit to our advantage:

No investing amount limit

The minimum contribution for MP2 is at least P500 per remittance. You can also opt to invest monthly, in non-monthly but regular intervals, or one-time remittance, as long as each remittance is at least Php 500. But, and this is crucial: there is no limit on how much you can save. Remember that because this is important for our hack. The only thing you have to think about is that if you’re going to remit more than Php 500,000, you have to do so with a personal or manager’s cheque.


The dividends you will earn will not be taxed, so more money in your pocket. We should always take advantage of tax-free investing.

No limit on the number of Pag-IBIG MP2 accounts you can open

A lot of people are not aware that there is no limit on the number of Pag-IBIG MP2 accounts you can open. While you can only have 1 Pag-IBIG 1 account, you can open an unlimited number of Pag-IBIG MP2 accounts, with their separate account numbers for identification.

Dividends distribution options

You have the option to receive your dividends annually through a bank deposit or at the end of the 5-year period.

If you opt to receive the dividends annually, you will receive the total principal amount you invested after 5 years. If you leave the dividends in your account, it will be reinvested into Pag-IBIG MP2 and will be taking advantage of compound interest.

Guaranteed safe

The Philippine government guarantees your MP2 investments. Unlike with your bank accounts that are only covered by PDIC insurance of up to Php500,000, the Philippine government guarantees your investment in Pag-IBIG MP2, whatever the amount.


Having laid down the foundation of our hacks, we will go to the actual hacks itself. The good news is, these are relatively simple to understand and totally legal. And we are not going to use some arcane information; these Pag-IBIG MP2 hacks are just creative application of the rules.

1. MP2 Rollover

Do not limit your Pag-IBIG MP2 investment to 5 years. If you have no planned use for the money, you can:

  • Withdraw your total investments plus dividends from Pag-IBIG
  • Open a new MP2 account
  • Rollover the entire amount, principal plus dividends, to the new MP2 account
  • Wait for 5 years
  • Profit!
  • Repeat process for another 5 years (and another, and another… depending on your investing horizon)

Although it’s not so much a rollover than a rollover with a slight bump in the middle, doing so will allow you to ride the MP2 gravy train for decades.

This method is good for people who will not touch their Pag-IBIG MP2 investments in the next 5-10 years or those with a long-term investing horizon. For example, if you are not sold on the Personal Equity and Retirement Account (PERA) scheme due to the relatively higher risk, you can put your money here instead.

(To learn more about PERA, read the post What is PERA and Why You Need One Right Now).

2. Dividend Harvesting

This strategy works exactly like its name. You invest your money, wait for the annual dividend distribution, and then instead of reinvesting the dividends to MP2, “harvest” it instead.

Dividend harvesting is perfect if you need to have a source of income annually but you also want to preserve the value of your principal. But for this to work, you need to invest bigger sums of money. But if you have at least a million pesos. If you invest at least Php5 million, you can virtually retire.

Let’s take a look at this calculation made by Pag-IBIG based on a one-time contribution of Php 1 million:

The dividend calculations are based on the 2-year average (2017-2018), which is 7.5%

As you can see on the first table, a one-time contribution of Php 1 million will give you Php 75,000 annually in dividends. Keep your money in MP2 for 5 years and you will harvest Php 75,000 x 5. At the end of the 5 years, you can get back your original investment of Php 1 million. You will harvest a total of Php 375,000 in 5 years.

Once again, I want to reiterate that this is not a guarantee. Past performance does not guarantee future returns. Future gains may be lower or higher depending on the MP2 fund’s performance.

Of course, when you reinvest the dividends with MP2, it will compound. It will leave you with a higher amount after 5 years compared to when you harvest the money every year. So you should assess whether or not dividend harvesting will be good for you and applies to your particular situation and needs.

People who would opt to dividend harvesting are those who need regular income and want to keep the value of their money. For example:

  • Retirees who have accumulated large amounts and need regular income but are not comfortable with taking risks with their principal.
  • People who achieved FIRE (financial independence, retire early) who want to receive regular income while they’re traveling the world and/or too busy enjoying life.
  • Those who receive or accumulated large amounts (inheritance, lottery winnings, exiting a business) who are not sure yet where to put their money, don’t want to touch it for at least 5 years, but also want to have spending money at the same time.

The amazing thing with this method is even though you will receive money from Pag-IBIG MP2 annually, you will not be taxed at income tax rates because the proceeds are tax-free.

3. MP2 Ladder

This hack is perfect if you need to prepare for expenses due on succeeding years. Here’s how to do it:

  • Open an MP2 account that will mature in the first year of your expected expense (ex: first-year college tuition);
  • The following year, open a second MP2 account that will mature on the second year of your expense (second-year college tuition);
  • On the third year, open a third account that will mature in the third year of your expected expense;
  • And so on… Visually, it looks like the photo below:

It doesn’t matter if you’re going to contribute once or monthly on all your accounts. As long as you open 1 account for each year the expense is due AND you fund all the accounts based on how much you need for that particular year.


Now that you have learned about these Pag-IBIG MP2 hacks, you can now then mix and match them depending on your need. For example, after 5 years of dividend harvesting, you can rollover your money into another 5-year MP2 account to continue enjoying 5 more years of harvesting. Then do it again. And again.

If you’re investing for retirement, you can keep on rolling over your investments every time it ends. And then by the time you reach retirement age, enjoy the fruits of your labor by harvesting the dividends of your MP2 investments that have already grown from decades of compounded interest.


These Pag-IBIG MP2 hacks are based on current Pag-IBIG rules and guidelines. If you ever follow any of these hacks, you can rest assured that you’re not breaking the law; these are all perfectly legal and available to everyone.

These hacks are great ways for you to invest with lower risk AND avoid paying taxes on those investments.

Do you have other Pag-IBIG MP2 hacks that you have thought of? Please share in the comments.

4 thoughts on “3 Pag-IBIG MP2 Hacks For Advance Investors

  1. Thanks Katie for sharing this information…i already started investing in MP2…planning for an early retirement and hopefully be financially independent before my retiring age….Mabuhay!

    1. Hi Rom,

      You’re welcome and good job on investing! MP2 is a great way to achieve financial independence and early retirement especially if you already accumulated a big sum of money.

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