Pag-IBIG Contributions and MP2 Savings, Explained

Pag-IBIG has two savings you might be paying into: the regular membership savings that come out of every payslip, and MP2, a separate account you open by choice. They work differently, and it helps to keep them apart.

Regular savings, and why they are capped

Your mandatory Pag-IBIG contribution is a percentage of your monthly pay: 1 percent if you earn ₱1,500 or less, and 2 percent above that. Your employer adds 2 percent. The part people miss is that the base is capped. Contributions are figured on a maximum monthly pay of ₱10,000, so the most that leaves your pay is ₱200, and your employer's most is also ₱200. Whether you earn ₱10,000 or ₱100,000, your Pag-IBIG line stops at ₱200. This ceiling rose from ₱5,000 to ₱10,000 in 2024, which is why the maximum went from ₱100 to ₱200.

What the savings become

Regular savings earn yearly dividends and can be withdrawn at maturity or under certain conditions. They also make you eligible for Pag-IBIG housing loans and the multi-purpose loan. The account is yours, so the contribution is closer to forced saving than to a tax.

MP2, the optional account

MP2, the Modified Pag-IBIG II program, is a voluntary five-year savings account on top of your regular membership. Its draw is the dividend rate, which has run higher than regular savings and is tax-free. The declared MP2 rate was 7.00 percent for 2023, 7.10 percent for 2024, and 7.12 percent for 2025. Rates are declared each year out of the fund's income, so they are not guaranteed in advance, but they have stayed in that range.

Regular versus MP2, side by side

Regular savings are mandatory, capped at ₱200 a month, and tied to your employment. MP2 is optional, has no ₱200 cap since you choose how much to put in, locks the money for five years, and has paid a higher dividend. Many people keep both: the regular savings they cannot avoid, and an MP2 account for money they want to grow and will not need soon.

To project an MP2 balance over five years, use the MP2 savings calculator.