Pros And Cons Of Pag Ibig Mp2

Saving money is a crucial part of financial wellness. It is a great way to allocate a portion of one’s income to future expenses, to build an emergency fund, or to reach long-term goals.

However, not all savings plans are the same. In the Philippines, Pag-IBIG MP2 or Modified Pag-IBIG II is among the popular options for Filipinos who want to augment their savings. But is it the best account for everyone?

In this blog post, we will take a closer look at the pros and cons of Pag-IBIG MP2 to help you decide.

Pros And Cons Of Pag Ibig Mp2


1. High Dividend Rates – Pag-IBIG MP2 offers high dividend rates compared to other savings accounts in the Philippines, with interest rates ranging from 4.58% to 7.41%. The dividend rates are announced yearly, so you’ll know how much you can earn every year. This makes Pag-IBIG MP2 a great option for those looking for lucrative returns.

2. Low Initial Deposit and Maintaining Balance – One of the perks of investing in Pag-IBIG MP2 is that it has a low initial deposit requirement of Php500, which makes it accessible to most Filipinos. The MP2 account also has a low maintaining balance of Php500, which is a lot lower compared to other financial institutions such as banks.

3. Tax-Free Earnings – Earnings from Pag-IBIG MP2 are tax-free, making it an attractive option for those who want to save without worrying about tax deductions. This means that you will receive the full dividend rate without any deductions from the government.

4. Flexible Withdrawal Options – Pag-IBIG MP2 also offers flexible withdrawal options, where you can either withdraw your earnings or close your account anytime. This makes it a good option for those who are looking for liquid savings that can be used for emergencies.


1. No Automatic Deduction – Unlike its sister program, Pag-IBIG 1, which is mandatory for all employees in the Philippines, Pag-IBIG MP2 is strictly voluntary. This means that you need to personally visit a Pag-IBIG branch to make deposits on your own, as there are no automatic deductions from your salary.

2. Limited Investment Period – Pag-IBIG MP2 accounts have a minimum investment period of five years. This can be a disadvantage for people who need to withdraw or use their savings in the short term.

3. No Online Access – While Pag-IBIG has an online platform, it does not include Pag-IBIG MP2 as part of its services yet. This means that you have to physically visit a Pag-IBIG branch to check your account balance and transaction history.

4. No Insurance Coverage – Unlike other savings accounts in the Philippines, Pag-IBIG MP2 does not offer insurance coverage. This means that if any unforeseen circumstances arise, your savings may not be covered, and you may lose part or all of your savings.


Pag-IBIG MP2 is a great savings option for Filipinos who need to grow their money without worrying about taxes and high initial deposits. It can be a flexible source of liquid savings that can be used for emergencies or long-term goals.

However, it also has some limitations, such as the five-year investment period, no automatic deductions, no online access, and no insurance coverage. Overall, it is important to weigh the pros and cons of Pag-IBIG MP2 before deciding whether it is the best account for your needs and goals.

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