Vince Rapisura 2444: Bakit magandang investment ang MP2: Cito Beltran interview
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00:00.0
... We are speaking with Vince Trapezura, financial expert and mentor who is currently in Taiwan. Vince welcome back."
00:18.4
Q1. Have you had the chance to mingle with the over 150,000 Filipinos in Taiwan?
00:48.4
... And also they want to know about mga investments on how they can place their earnings in the Philippines. So siyempre pre-promote natin ang SSS, ang pag-ibig, ang mga retail treasury bonds ng gobyerno."
01:18.4
... Sorry I'm jurassic. I said hello, pag-ibig is housing, what investments are you guys talking about? And apparently I'm the illiterate in the room."
01:49.4
... As our national savings program."
01:52.7
Q1. So it was established as a national savings program?
02:00.7
... Yes. Kasi remember everyone of us, especially employees, are required to enroll in pag-ibig and then you save every month 100 pesos and then there's a counterpart from the employer which is 100 pesos also. So that's the main essence of the fund of pag-ibig. So it's a mutual fund where we all become members and then the fund that they get from that, that's the fund that they use for housing.
02:31.4
Okay. So hindi siya housing talaga, fund development siya. And so okay, now talk to us about what you are promoting especially to Filipinos in Taiwan regarding investments because there's so many people looking for investment possibilities.
02:52.0
... And now uwi lang sa baboy, sa manok, sa buy and sell. But the next level is to invest in funds such as that. Could you explain that?
03:22.0
... And mind you, Sito, this is tax-free because it's a government program. And then it's also 100% guaranteed by the government kasi again it's a national savings program. Compared to the banks na ang savings insured is only up to P500,000 by the Philippine Deposit Insurance Corporation, for pag-ibig MP2, it is unlimited so you can put in millions and millions and it's 100% covered by the government.
03:53.0
Okay. And so what is this MP2 you're talking about?
04:00.6
Okay. So we have the regular pag-ibig savings one. That's the one where we should be regularly contributing every month. We are required to do that. If you earn P5,000 per month, you are required to do that to contribute P100. And then if you're employed, the employer will contribute P100 also as a counterpart.
04:23.4
Okay. Now, if you want to save more, pag-ibig opened another savings product. It's called pag-ibig MP2. It's modified savings pag-ibig 2.
04:35.0
And so the term is for five years. You can start with P500 and any deposits that you want to place should be at least P500. Unlike pag-ibig 1 or P1 where you can put in every month, eto namang pag-ibig MP2 you can put in anytime you want.
05:01.4
You can add up to your account. So you can open an account and you can save on that account every month, every week, every day, or even just once kung ano yung gusto mo, whatever your purpose for the account is.
05:17.2
So you have to be a pag-ibig member. Kasi dati akong pag-ibig and then when I left the Philippines, I used to be a pag-ibig member. When I left the Philippines, basically my employer said,
05:30.2
you know, we can pull it all out for you para clear ka na when you leave the country. And I never really reinstated. So what happens if you're no longer a member, you're not a registered member?
05:45.8
As far as I know, Sito, once a member, you are always a member. So you can withdraw your funds. It can be down to zero, but your membership will not disappear. Very applicable to people who are migrating.
06:02.0
I have family members who have migrated and they also took all of their funds, pero they're still members. And when they heard about pag-ibig MP2, bumalik lang sila. So for you, for your case, I think pwedeng-pwede ka pa rin bumalik.
06:17.0
Okay. Now, you mentioned that pag-ibig 1, basic fundyon, all employees, you have to contribute P100 a month if your salary is P5,000 above. Now for pag-ibig MP2 or modified pag-ibig 2, you can invest as little as P500 to how much? No limit sabi mo?
06:43.9
Yes, no limit. Kasi what pag-ibig will do with the fund that they mobilize, they use that to fund the salary loans. So pag-ibig also gives salary loans to employees aside from housing loans.
06:58.9
Well Vince, I know you, you're a very careful individual and you're not going to put your name and your reputation on the line by endorsing something you haven't double-checked.
07:10.9
Now, how sure are you about this setup? Because, inaaral mo ba yung performance ng mga platforms ng pag-ibig? Because nagpapautang sila for salary loans. How good are the people in paying back those salary loans?
07:35.9
Actually maganda yung performance dito. When I attend the chairman's report of pag-ibig fund, they always report that they get very good ratings or very good audit from the Commission on Audit.
07:56.9
So laging unqualified ang kanilang audit report from the Commission on Audit and that sends a strong signal na talagang yung management ng pondo ay maayos.
08:10.9
Kasi sabi ko, these things should also be reported in the media. Kasi to also build trust with the agencies, not just the people, not just the politicians who are running with our elections.
08:23.9
Kasi institutions dapat talaga yung strong sa atin and that's what I'm happy with pag-ibig MP2.
08:28.9
And when I compared, I tried to take a look at the dividends in the past since its inception, talagang napakaganda. And ang lowest that I saw was about 4% and the highest was 8%.
08:43.9
And I also talked from experience kasi I tried it out myself and very encouraging siya. One of the things that you just have to be mindful of is, of course, pag-ibig is not a bank.
08:58.9
Kasi kung nag-time deposit ka sa bank and you opened a time deposit, you want to pre-terminate it, you can get your funds immediately. For pag-ibig MP2, it takes about two weeks to about a month to be able to liquidate, to pre-terminate your savings.
09:15.9
So pwede mo parin pre-terminate. But before we even go to pre-terminations and headaches, Vince, can you explain that? Kasi who can do it? You're promoting it in Taiwan.
09:29.9
Lalapit sa iyo may mga... Sir Vince, paano ba dapat namin gawin? Pwede ba kami dyan? Baka maipit pera namin? Okay you said 500. What is the ideal investment for an employee or for some people who just have some extra cash na hindi pa naman nila magagamitin?
09:53.9
Sorry Vince. Kasi there are people with money that's not big enough to put up a business but too little that they're unhappy to just put it in the maleta.
10:08.9
So it's good to point out that we have to diversify our investments. So don't put everything in pag-ibig MP2. So that's very clear. And then when you save, kailangan po na you start with a purpose first. Para saan ba ito? Is this for accumulating capital for your business? Is this for the education of your children? Is this for your retirement fund?
10:35.9
So you can actually open multiple accounts in pag-ibig for that or you can choose also other financial products appropriate for the purpose that you want. So sa pag-ibig, ang usual po na nirecommend ko, maganda ito usually kapag pang edukasyon ng anak. So lalo na sa mga OFWs, I ask them to open an account every year kasi you can have multiple accounts with pag-ibig MP2.
11:02.9
They open an account every year for five years. Tapos once their child would already go to college, so may every year nagmamature na account and that would now be the budget that they will use for the education of the child for that year.
11:21.9
In other words, for every grade, sige para sa grade 6 niya, mag-open na tayo ngayon. Pagdating ng 12 months or one year and a half, pwede natin bunutin yan. Yan ang pumabayad natin for the tuition fee for grade 6. And then another account for grade 7, grade 8. Ganoon ba?
11:44.9
Yes. Usually for college ko siya tinitignan kasi usually ang tina-target talaga natin, the lower income groups and they usually go to the public schools. So ang college talaga yan ang tinitignan natin. Kasi five years yung terms ito. So you have to wait five years. So on the sixth year mo siya technically mawi-withdraw. So medyo long term yung term natin.
12:06.9
Buti nagtanong ako. Ibig sabihin you have money, you put it in and it stays in for five years unless you pre-terminate lugi ka. But five years patulog or papatabain yung pera mo.
12:36.9
So if your purpose is for emergency savings, something na kailangan mong mabuno agad-agad, then pag-ibig MP2 is not the most efficient way to do that. So kung ang purpose as I mentioned pang education, pang patayo ng bahay, then that's good. And that would depend on how much your budget is for those things.
13:06.9
As an example, it would be something more of a time deposit arrangement. You have the time, you have the money, you deposit it and then you forget about it for the next five years.
13:36.9
So you have to pay a fee or you lose some money.
14:06.9
So for example, last year the dividend rate was 7%, 7.03% to be exact. The 3.5% will go to pag-ibig as the fees and the 3.5% will go to you.
14:33.9
So the capital is still preserved and you still earn. And effectively if you take a look at it, it's still higher than most time deposit rates even if it's pre-terminated with the fee.
14:46.9
Okay. Vince, can you please explain that to our audience? Because most of us don't, wala naman kaming time deposit. So paki-explain nga, kung papipiliin mo between a bank and a pag-ibig, what's the scenario?
15:16.9
So for time deposit sa banks, you can pre-terminate it anytime and it's very liquid. It can also preserve the capital although yung interest rate na ibibigay sayo once you pre-terminate it will be lower than what they have quoted you originally.
15:32.9
So that's the advantage for time deposits. A lot of people think kasi na yung time deposit ay hindi na pre-terminate that you have to finish the term before you can withdraw it.
15:45.9
But in reality, you can actually pre-terminate it but the interest rate that they will give you would be lower. In my experience, the capital is also preserved pero talagang wala ka na talagang kikitain sa interest.
16:00.9
Sa pag-ibig, mayroon.
16:02.9
Yes. Sa pag-ibig, mayroon pa rin kahit na mag-pre-terminate ka. I really concur, Sito. Even I took a look at all the commercial banks in the Philippines, hindi talaga nila makayang talunin yung pag-ibig MP2 dividend rate.
16:19.9
Although, the difference also is for time deposits, you know how much you are getting because the bank already tells you the rate beforehand.
16:31.9
Yes. Fixed rate sya. For pag-ibig MP2, it's variable because although it's a savings program, it's not a bank. It's a mutual fund.
16:40.9
Therefore, we earn from dividends from it. Dividends are declared every March or April of the year and it varies from its inception from 4% to 8% per annum.
16:55.9
But they always have a payout. Hindi yung nalulugi or sorry walang kinita last year.
17:04.9
Oo. Wala pa naman. Actually, ang interesting na tatanong sa akin dito ng mga OFWs ay, paano sir Vince kung gamitin yan sa maharlika fund?
17:14.9
Kasi na-cheese miss dati na tinitignan yung pag-ibig na gamitin for maharlika fund.
17:21.9
And I told them na of course that's one of the risks in getting to pag-ibig but we are not 100% powerless.
17:30.9
What we can do also is if it's going to be used for the maharlika fund and you don't agree with it, you have the power to withdraw from pag-ibig MP2 and do the pre-termination.
17:44.9
Well, you can also take it to court as far as I'm concerned because that was not the design of that investment engine and the contract is between the people and pag-ibig and does not involve any third party who can meddle with the money.
18:01.9
Anyway, that's a different political issue, Vince. So when you study the profile of pag-ibig payouts or interests, the interest they give, compared to private banks, what did you learn?
18:20.9
So if you have about P500, you get the same dividend rate for pag-ibig. So it's regardless of the amount.
18:32.9
For commercial banks, habang tumataas yung amount na nilalagay mo for time deposit, doon palang lumalaki yung interest rate.
18:43.9
So yung dividend sa pag-ibig MP2, it's applicable to all. So it's democratized. It's not based on how rich you are.
18:52.9
And the highest interest rate that I got from a bank is you have to place P1M. This is from a commercial bank, P1M and it attracts about 4% per annum but they will still take out 20% withholding tax.
19:15.9
So yung 4% mo, ang effective rate niyan talagang 3.2%. For pag-ibig MP2, it's tax-free. So when they say it's 7%, you get net 7%.
19:28.9
Okay. And on the average, I'm sure you did the multi-year average. Ano yung lumalabas na actual interest rate in a five-year period?
19:47.9
Pag-ibig versus private.
19:51.9
So commercial banks, usually it would range with 1% to 3% per annum with 1 million. I'm talking about 1 million. For pag-ibig MP2, that would be an average of 6% per annum.
20:12.9
I think this is a very good way to challenge the banks also to improve their financial products. So if pag-ibig MP2 can do it, why can't they?
20:23.9
Your point is correct and that has actually been a topic of discussion in the West now where the opinion makers are challenging banks and exposing the banking system.
20:43.9
That the global banking system is not pro-consumer. And that is why when my wife pointed out that pag-ibig is a better performance, e sabi ko po, rinom na itong nakako nagsasabi sa akin, e sabi ko, hanap tayong expert.
21:00.9
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