Pag-Ibig MP2 or Dividend Stocks? Here's the truth | The Dividend Investor Podcast

本站添加: 2026-05-26

[00:00:00]Yeah. So, I want to actually point out that Pug Ebig is essentially a leveraged bet on Filipino housing because that's where 70% of the funds are in loans, housing loans. So, you're you're betting on these members paying back their loans. Actually, now I'm pretty torn because on one hand, yeah, it's very concentrated in Filipino real estate, but on the other hand, it's governmentbacked.

[00:00:28]Hi everyone, I am Aaron Lei and you are listening to Dragonfire's The Dividend Investor, the podcast of the most profitable hour of the day. So this is the podcast where we help you build the dream life that you want, one dividend payout at a time. This episode is pretty exciting because we're going to discuss the number one thing about MP2 that no other content creator is talking about.

[00:00:48]How much money did Franco make in dividend stocks, comparing it to what he would have made in MP2 if invested in the same year? and the three bucket framework that lets you invest in MP2 stocks and global funds and the government program that could actually potentially beat MP2 given that it's tax-free advantage and the 5% tax credit that it pays you out based on your contributions. So, if you're an MP2 investor, this episode is going to be of great value for you.

[00:01:17]So today I'm joined by Franco Fernandez, equity research analyst at Dragonfly Securities, also known as the guy in the brown jacket and my very first guest in this dividend investor podcast. So Franco, say hi to our audience.

[00:01:31]>> Hi everyone. It's uh nice to be back again for I think the third episode.

[00:01:37]>> Third or fourth episode. I agree.

[00:01:40]So Franco, I mean I always ask people or guests each and every time, but maybe just for one sentence, could you please tell us how early did you start in investing and maybe a little bit background?

[00:01:52]>> Uh for the third time in this podcast, I started in 2017 and I started investing because of family.

[00:02:02]>> Mhm.

[00:02:04]Everyone knows you've started at a pretty young age. And for those of you guys who have watched the first episode, Frank was the guy who's now making five digits in dividend income based from his investments about Just kidding. I don't know the number >> and you won't know the number >> and I won't know the number. So you clearly know that he's the correct person to answer all our questions today talking about stocks and dividend investing. But for today actually I would take your side on this one guys because today we're going to talk about MP2 and comparing it with the pros and cons of stocks right. So for those people out there who doesn't know anything yet about pagig MP2 so it's a voluntary savings program where pugbig pulls your money and then it lends it out to umig members as well as housing loans. And so the money that they make from that from that loan to other people, they give it out back as dividends to those who invest into PGBI MP2. And last year that paid out to be 7.12% in 2025. So Franco, my question to you is when you were starting out in investing, what was the reason as to why you went for stocks? Cuz what what were you thinking back then? Because people tell you just go real estate, right?

[00:03:19]Your parents will tell you that or maybe you see it online that just go for MP2.

[00:03:23]It's very safe. So why go why did you go stocks?

[00:03:26]>> Well, at the time because I was young, I had all the years ahead of me. I had the risk appetite. So, and I wanted something, you know, more rewarding, exciting, and opportunistic. So, I went with stock investing or, you know, dividend investing. Um, for me personally, MP2 when I looked into it, it didn't seem that attractive to me. It didn't seem very exciting because all you would get is the yield unlike in you know stock investing you get what the yield the dividend yield dividend growth and then price appreciation.

[00:04:04]I'd like to like flesh it out even more later. But what you're saying is you're not satisfied by the 7% payout alone because it doesn't have the capital appreciation when your money grows in value, right? With the value of the asset grows.

[00:04:20]>> Yes. But you know, obviously it depends on the person. For me, I would prefer dividend investing. But for someone who's like for more focused on capital preservation or who likes to keep things very simple and doesn't want to do, you know, like all the research and all the all that work, then MP2 is for you.

[00:04:40]>> I'm just curious cuz that was your reasoning when you started. Yeah.

[00:04:44]>> But do you still share the same stance today? Did it differ? It's my stance on MP2 or dividend investing is it it depends on context.

[00:04:55]>> It now it it definitely depends on context on where you stand as an investor.

[00:04:59]>> Depends on your age bracket.

[00:05:00]>> Yeah.

[00:05:01]>> Depends on your risk appetite and your goals.

[00:05:03]>> Yes. Exactly. So you've made a great point about stocks having the capital appreciation from the asset itself. like when the stock price goes up, right? You make money on that. And you also get a very good point of yours is you also get growth in the dividend payout unlike MP2. But I would like to represent our audience because there are a very good arguments for MP2 as well. Like we're just trying to lay down the point.

[00:05:31]>> See, I'm not against MP2. You're making it seem like I'm against MP2, but I'm not. So >> yeah, we just want to like >> going to be on, you know, MP2 side. I'll be on the >> Yes. Yes. Exactly. That's our rule for today.

[00:05:42]>> Yeah. All right. Yeah. Okay.

[00:05:43]>> First case is MP2 can give you 7.12%.

[00:05:47]Well, it gave 7.12% in 2025.

[00:05:51]>> If we look at inflation, the spread isn't that attractive anymore. For example, uh you have 7 you earned 7.12% last year. The April inflation rate was 7.2%. So, if you look at that, if you compare those, you're losing. And then the BSB forecast for for 2026 is now 6.3% on the upper range. So obviously your spread is a lot lower. And and the yield that's what you get. That's actually not even that the 7% is not even what you get because the way it works in Pugyic is it's based on the average balance or the time weighted balance of your entire account value because it's not as simple as 100,000 times 7.12%. It's let's say you invested you you deposited 5,000 every month for 12 months. Your average balance would be about 32,000 something. So that's the value that gets time multiplied by the 7.12% rate. So you're not actually earning the full 60% with that 7%.

[00:06:55]60,000 with that 7%.

[00:06:57]>> It's because what you're saying is that normally I mean sure if you do lump sum if you do put it all in right at the start then you would get that as an average.

[00:07:05]>> You would get the whole it's actually that whole time weighted thing is also it also applies to dividend investing especially if you put 5,000 every month.

[00:07:12]But the thing is there are different payouts for pbig you're paid out once a year but in dividend investing depending on the stock you can do quarterly semiannual and those you can actually buy more before the x date and you would get that amount it it's not as like oh the ebig is going to pay out next month I should put more money in you're not going to earn on that whole amount unlike in div investing you buy a th000 more shares you're going to earn on the whole amount of that 10,000 shares.

[00:07:43]>> It's a very good point because as you mentioned like it's if MP2 when you buy it matters more because like as you said it's going to average out right. So if you buy monthly >> then your average would be closer to like I don't know the initial amount right >> you would earn let's say you're 7.12 and then you get multiplied by the 32,000 balance the average balance your yield would be about 3.5%.

[00:08:10]>> Yeah. your net yield on the entire position.

[00:08:13]>> Not unlike in dividend investing. All you have to do is have to have that stock before the cutoff period >> for you to get all the dividends. Right.

[00:08:20]>> And you made a really good point, Franco, about saying that basically you have to keep up with inflation. If MP2 is really close with inflation, you're not making 7% on your money because all the goods that you need to buy also went up 7%.

[00:08:33]>> Yeah.

[00:08:33]>> So, it's basically you're flat.

[00:08:36]>> Yeah. I mean it's even wor it's not it doesn't look as great also for dividend investing especially if let's say OGP you invest in OGP it's earning right now at 7.6%.

[00:08:47]Uh you you that's not even that's the gross yield. So you have to multiply that by 10% subtract 10% because of the dividend tax. So you're looking at maybe closer to 7% flat or 7.8%.

[00:08:59]So on a yield uh yield to yield basis MP2 still stands out. But what changed as of late uh recently is parah. So although you know parah has a you only get that when you retire but now with parah uh it becomes more competitive because you earn now that six uh 7.6%.

[00:09:23]>> Because you don't have the tax anymore.

[00:09:24]It it becomes the tax advantage becomes almost as good or even better than MP2.

[00:09:29]>> But MP2 is also taxfree. And I'd like to um just share with our audience how important is it for PAR and both pag MP2 to be taxfree because what people don't realize is that when you get your interest payment from your favorite digital banks or when you get your interest payments from your time deposits or or bonds for example you get taxed after that.

[00:09:53]>> Yeah withholding tax.

[00:09:54]>> Exactly. So for example, if you're getting 5% in investing into into something into time deposits, it's going to be taxed.

[00:10:03]>> I would say time%.

[00:10:04]>> Yeah, time deposits don't even shouldn't even enter this conversation because you're earning what a a gross yield of like maybe five 6%.

[00:10:13]>> If you compare it to dividend investing, money market or even MP2, it loses >> because there's you still have a lockup period as well. Yeah, >> shorter maybe but less return.

[00:10:26]>> Yeah. So that's which is a very good point that we're giving it out like a 5% yield or like interest payout from time deposit is like going to be 4% at the end of the day. Right. So basically your payout gets cut unlike MP2 and stocks is what we're trying to say.

[00:10:43]>> Like let's say you get 5% you get maybe 4%.

[00:10:46]>> Yeah. Exactly. And that's what not a lot of people realize because true to them what you see in advertisements is the 5%. You don't see the >> gross. You always see the gross.

[00:10:58]>> You always see the gross. So don't get misled by thinking that you will take home the full 5%.

[00:11:04]>> Is what we're saying.

[00:11:05]>> Unlike in MP2 they say 7.12. You you will get 72% on whatever balance was in your account for 12 months.

[00:11:15]>> Yes. Again average balance.

[00:11:16]>> Yeah. Average balance. Can you please tell me more about PAR Franco because you've briefly mentioned about how if you invest in stocks and you use a product or vehicle under Dragonfly called PAR, you get also taxfree and dividend income and I guess there's other benefits to that as well. So could you please elaborate?

[00:11:34]>> So if your goal is retirement then para becomes the obvious winner compared to MP2 >> because with MP2 every five years you're going to have to restart, right? But with PAR you don't. you're uh you can keep growing that without having to open a new MP2 account and so there's no taxes on MP on par you don't have the 10% on dividends or the 20% withholding on funds so you're getting the yield you see and another there are a lot of benefits like um >> the 5% >> the 5% yes right the 5% annual tax credit you get the no taxes on estate planning if you pass and it gets passed on to your family members and with and uh with PAR And although you you do you can't touch it until you're 55 years old with five years of contributions you have a lot more flexibility and I would say optionality because in MP2 it's all housing loans majority 70% I think is all housing loans so there's concentration as an investor you want to avoid concentration risk and there is concentration risks in pigbing MP2 especially if uh there are defaults although in the last like 45 plus years of paging, there's there's never been any major or detrimental um defaults.

[00:12:52]So, let's hopefully that stays that way and it probably will, but you still have that risk. It's never 100% risk-free even though it's governmentbacked because if you know housing, if there's a housing crisis and if everything crashes, obviously it's at risk there.

[00:13:09]With PAR, you can invest in different sectors, utilities, banking, real estate, uh, telecommunications. You have all that options and if something doesn't work out, you sell and then you can hold on to that cash. You can move into funds. You can go to PAR, money market, and eventually global funds. So, obviously, you have a lot more control with PAR than in MP2 because in MP2, you're just giving your money to the government or to the fund >> to the manager >> manager to the manager to manage it on your behalf. you've mentioned about how it's being governmentbacked and I just want to reiterate on that because that's a really that's one of my main points as well as because if you invest into pag MP2 sure there's 70 I mean that's the magic number 70% should be invested in housing loans and 70% of whatever they make has to be paid out that's the minimum right >> and I want to also mention the risk because in the last couple of years PBA MP2 has distributed 7% % about that's the like the average yield in the last what three two four years and then the housing loans that they give out are let's I think on average four to 6% depending and it can go as low as 3% on special cases so obviously the spread is not is negative it's a negative spread if they're giving it out as high as let's say 6 or 7% because they're giving out like last year 7.12% so obviously they rely on a growing base more contributions every month and every year. They rely on the volume of people, you know, getting housing loans because if that slows down, they're going to have to reduce the the yield to maybe even 5% to the legal floor, which is 70% payout ratio because right in the last 5 years, it's what 90 plus% on average. I >> I want to nitpick on what you're saying because you're making a really good point here. like you're saying is that they're paying close to 100% payout ratio already, meaning that they're like pushing it to the limit already in terms of what they could express as dividends, right?

[00:15:11]>> And that's fine because it's it's like a REIT. They're required by law to distribute a high payout ratio and to give back because that's the whole point. I'm giving you my money and then you're using that money to fund other members as loans and obviously I want returns. But the only concern there is that there's going to be very little room for growth. Like for example, in bad years, right?

[00:15:34]>> Oh, yeah. Bad years.

[00:15:35]>> Basically, the 7% that you're getting last year or maybe this year, you cannot expect to get maybe like way higher than that anymore because they're already close to paying out what the the best that they can. Basically, >> they peaked in 2017 at 8.11% yield.

[00:15:52]Since then, it's been a an average of 6.9% in the last 10 years, 6.15 in the last 16 years. Did dip during 2021 to 6%. So, it really depends. Lately, we're we're I think we should be happy that lately has been having a good, you know, couple of years.

[00:16:12]>> Yes.

[00:16:13]>> Yeah. New uh record uh income levels, record contributions. Yeah. But once that slows down, then there's risk of, you know, not getting that 7% anymore.

[00:16:24]>> That's a really good point. And again, if you don't get that 7% anymore, let's say they have to do a cut because they're at their limit, right? They have to cut down to 5%. You cannot pull out the money, right? You have to stick with the 5%. They're basically keeping 1% one less than 2% in reserve for any you know like for example if they're >> any bad thing happens >> because they're they're dealing in trillions of assets and >> in housing loans >> and so let's say a 1% default although that's pretty large and probably won't happen. They don't h the the earnings the the earnings they set aside last year is not enough nowhere close enough to cover the defaults if it hits 1%.

[00:17:04]Okay. But may counter >> obviously I'm pretty sure in the last couple of years they've built some because although it's pretty close although they do say that they have a good capital adequacy ratio.

[00:17:13]>> Yes.

[00:17:14]>> It's just there's no we can't see the number. We can't see the true numbers.

[00:17:17]>> That's what that's what I was about to say like unlike for example when banks right they're public companies so they can they should disclose all >> limited disclosures with pug ebig.

[00:17:26]>> Yes. Basically it's going to be hard for people to see once there are cracks that's showing up. Right. So it's really hard to scrutinize the financial statements, the complete and detailed financials of PGIG, but I kind of see the bright side of the picture as well is because I mean imagine if like it's going to cause if it's public info, it's every little small bumps might cause people to get scared and you know like panic and try to take it out even though they can't. Plus, I feel like they also do that because they know that they're governmentbacked >> and if the fact that it's governmentbacked, there is political agenda behind it like >> because you know sometimes you can appoint someone else and agendas change and they can say oh we want to stick to the 70%, we want to build a better capital buffer for our loans because let's say >> the BSP is tightening again and uh inflation's not looking great.

[00:18:21]>> Depending on which administration is sitted, they will have different priorities. Yeah, they can have different priorities which will affect a governmentbacked fund.

[00:18:29]>> Yes. But just to catch up our audience, right? When we say a governmentbacked fund, it just means that whenever they go like people don't pay back their housing loans or they has to step in, >> the government has basically bail it out. They'll bail it out.

[00:18:43]>> They're legally >> required or obligated to do that.

[00:18:46]>> Yeah. So, I want to actually point out that Pug Ebig is an essential is essentially a leveraged bet on Filipino housing because that's where 70% of the loan of the funds are in loans, housing loans.

[00:19:00]>> So, you're you're betting on these members paying back their loans.

[00:19:05]>> Actually, now I'm pretty torn because on one hand, yeah, it's very concentrated in Filipino real estate, but on the other hand, it's governmentbacked. Oh, actually just I want to add when I said it's governmentbacked, the government can guarantee that you get the full principle, but the dividend payout is a question mark, >> right? I guess this is the termination uh the the penalty fees. Is that what you're talking about?

[00:19:28]>> Aside from that, like I mean even in the worst case that they have to go like they need the government to step in.

[00:19:34]They can like bring back the money, the principle to the investors, but the dividends is a question mark. Like >> for example, before they said they're going to pay out 7%, right?

[00:19:44]>> That might not be the >> this year. We don't know, but I'm pretty sure they they could maintain the 7%.

[00:19:50]Maybe there's a good chance. I mean, just historically speaking, based on the trend, but it's still never certain.

[00:19:57]>> Another very good argument I have for Pibb2 is the there's no, as far as I know, there's no maximum limit in terms of contribution.

[00:20:05]>> Yes, but there is a minimum.

[00:20:07]>> But there is a minimum 500 pesos.

[00:20:08]>> But there's no maximum. You can put as much as you want.

[00:20:11]>> Yeah. But in PAR, there's currently there's a maximum of 200.

[00:20:14]>> That's another Yeah, that that's a good point. That's one of the drawbacks of PAR. You can only contribute 200,000 if you're a resident and 400,000 if you're an OFW. But eBay, whatever amount you want as long as it's minimum of 500, >> you're good to go.

[00:20:27]>> Minimum 500, no maximum.

[00:20:29]>> But per no minimum amount. You can put whatever amount you want.

[00:20:33]>> So they balance out each other, right?

[00:20:35]No minimum and the other one, no maximum. Uh, and the last thing I also want to point out about PAR versus MP2, with PAR, once you've hit your retirement age, you continue to earn passive income. Your yield on cost is probably a lot higher now. The dividends have grown potentially price appreciation is also a lot higher compared to MP2.

[00:21:00]You just have the yield and then after 5 years it's risky to lock it up again for another 5 years >> once you hit retirement. You basically have to pull that money out or else you're going to lock it up for another 5 years or if you'd sit it there. It's not going to earn anything anymore. That's a good point. After eight years.

[00:21:20]>> Yeah. So after retirement age and in pair you you're not required to withdraw it right away. You can let it sit first.

[00:21:25]>> Exactly. So with parah at least um if your goal is retirement with parah it's it will keep making you money you will keep earning passively every quarter or every semiannual or every year >> and at any moment you can quote unquote lock >> and every moment you can just sell it >> yeah speaking of the locking period as we mentioned for pbig MP2 there is the 5-year uh lock up that's correct but then a strategy that ICN is effective with MP2 investor ers out there is they deployed this what they call the rolling strategy in a sense that instead of opening just one account and depositing everything all at once they split the money into five accounts and so what happens is that they would have different unlock periods. So by year six they would have one accounts one account that unlocks year after year ever since starting year six. So it helps with liquidity because they are able to gradually go in and gradually go out of the pig lock up period. So what do you think about that? Isn't that a viable strategy?

[00:22:30]>> Yeah, that I think that is a the strategy for MP2. If if your only focus is MP2, that is the way to go because at least that way you're able to basically roll everything. M >> and um but the thing is you have to wait 5 years for everything and if you you know terminate before you have a high penalty >> of 50%. compared to Terra it's uh it's only 20% of total income earned and the the thing about the 50% with MP2 >> sorry 50% on the dividends on the dividend not not the principle right >> yeah it's 50% you you keep the you keep the principle untouched basically even though you've earned let's say on a th000 in year 1 2 in year two and 3,000 in year three they're going to take 3,000 back from you and >> out of the 6,000 That's that's if you had if you chose the option of having that money reinvested. But if you had the option of the money being deposited into your bank account because that's an option, they're going to take away the 3,000 from your principal there. So it's pretty high 50% on on dividend earned and it's not on the dividends you just earned, it's on dividends you've earned throughout the whole period.

[00:23:48]>> Yeah. And guys, when we say principal, we're talking about the sum of all your contributions. basically the total amount of all the money you put in >> and then for PAR it's 20% on the gross income earned on your investments.

[00:24:00]>> What what I'm hearing you say is that the penalties in PAR is far less >> is less >> is less compared to um pag because you're looking at 50% on all dividends earned and 20% on all income earned which is essentially the same. It's just that 50% versus 20.

[00:24:16]>> But also on the other hand I think of it as I mean it's 5 years compared to waiting until you're 55. I'd like to point out also that the lockup period might not be as bad as we think because it could actually be an advantage for MP2 investors. Like for example, when there was a COVID crash, an argument that I could make is don't panic sell.

[00:24:34]>> I don't panic sell, right? Everyone is scared of what's happening in the market, the whole financial market.

[00:24:39]>> But you're forced to hold is what I'm saying. But the problem is with that, I guess my counter is that the opportunity cost is gone because you're giving up so much opportunistic buying opport >> you're giving up a lot of buying opportunity because during every crash all the stocks are down like you know they get sold down because of fear. You miss out on the chance to buy you miss out on chance to buy ICT. you missed out on the chance to buy Moralco um SGP at these low prices and now they're at all-time highs. So, you missed out on like the um price appreciation and dividend growth >> and if you want to if you have a business opportunity you want to get into right your friends.

[00:25:21]>> I mean it's great that uh with MP2 your money is safe but so during financial crisis you don't really lose a lot but during the economic booms you don't gain anything as well.

[00:25:30]>> That's a good point. You miss out on the upside. I mean you get your downside protected. Yeah, you're protected on the downside, but you miss out on the upside.

[00:25:37]>> And that's one of the risk that not a lot of people talk about, the upside risk, basically missing out on >> and that's why I like divid investing because okay, sure, I will lose this much during the crash, but then I can make this much on the bull market >> actually. But before you continue, I'd like to point out that that is assuming though that you were able to sell at the top first and then >> it's also assuming that the Philippine market enters a bull market. Yes, that's that those are two very critical points to make cuz you can buy the dip or the low if you have sold somewhere at the top or near the middle.

[00:26:11]>> But we that's just on stocks. We also have funds.

[00:26:15]>> That is true. We have global offshore funds that will let you invest in global technology, AI, the S&P 500, Japan, uh China, Hong Kong, and all the other Asian countries, South Korea, Japan.

[00:26:29]Yeah. So you have mentioned about trying to buy the very bottom, trying to buy the very dip. I mean if you have bought ICT at the COVID low, you would have made like I don't know 5x >> I think seven times your 7x your money, right? That that is crazy numbers >> maybe. I think maybe like let's say it's like a 100 pesos. You bought it at 100 pesos. Now it's at 700.

[00:26:51]>> Yes. But another point that I'd like to make is that I mean IT has gone up 7x but other stocks the draw down that they have is also much worse. Like >> it's much worse.

[00:27:00]>> They could go down 30 50%.

[00:27:02]>> Some are still near COVID lows.

[00:27:04]>> Exactly. At the very low. So what I'm saying is that the swings of 30 50% draw down on some not so good stocks and the upside swing that's what we call volatility. And not a lot of people could stomach that. stomach that um volatility, right?

[00:27:22]>> Yeah.

[00:27:23]>> It could become it could induce them to become very emotional and they panic sell. So instead of buying the lows and selling at the highs, they kind of do the opposite. They sell at the lows and then they buy at the highs. That's the normal behavior of an investor, right?

[00:27:39]>> Yeah, you're absolutely right about the volatility. Some stocks are if you've held that for 10 years, you're basically down or break even at the best case. But I would argue that this market is a stock pickers market. You have to be really careful. Like I do admit that the PSSE hasn't done great. We've been consult in a rangebound state since what 2013.

[00:28:02]>> That's what I wanted to point out as well.

[00:28:04]>> And if you look at it that way, you're going to be deterred from investing and you're going to miss out on a lot of other opportunities because >> means uh Philippine stocks basically.

[00:28:14]you're going to miss out on a lot of opportunities because while the broader market doesn't look great if you look at individual stocks that's where you're going to win because Moralco ICT Manila Water SGP Abortis Power before 2026 um you have the REITs who did pretty well also so it is a stock pickers market you have to be really picky and I I know that a lot of people >> bet on the right things >> yeah and I know I know it's hard also to say Okay, this is all in hindsight obviously. So how do you know? I don't want I don't want to do all the research. I don't want to do all the due diligence. And I guess that's where you know Dragonfly can help there because of the D15. So we created D15 which basically consists of the best 15 stocks >> best 15 dividend paying stocks and that has outperformed all the benchmarks just for a comparative basis. And what's good about this is that because another argument I could make for PBI MP2 is that it's very easy to start. There's little to no um learning curve. Yes. As compared to the stock market that there's a steep learning curve, >> right? So let's say this is how much you need to know about MP2. This is how much you need to know about stocks.

[00:29:26]>> Maybe maybe way higher.

[00:29:27]>> A little higher because there's a lot of nuances. So yeah, you're right. It's MP2 is the safest and the easiest way to get invested. and first talks is that it's not like you can just sit it down once and learn about it. You have to have gain the experience over years, right?

[00:29:44]>> And that's why we created the D15 and the signature portfolios, right?

[00:29:49]>> So with the signature portfolios, it's easy now to copy people. You have you can copy um the entire research team.

[00:29:55]You can copy Sir John's portfolio, my portfolio, um Jared's portfolio. You can even copy influencers moneywise >> who's an OFW >> OFW and a great investor because she's I think retired. So for those who are planning retirement, you should definitely follow her portfolio.

[00:30:12]>> You have investing PH who's actually still I think in his uh 20s or 30s. So he's a good for anyone in the middle ground. And then you have Stock Slug who's also a good investor. And then we also have Trina's Pix. She's a great dividend investor and someone worth following I believe. Yeah. And then I just want to also point out with the D15 because we also have the D15 part of the signature portfolios and as I mentioned it consists of what we believe to be the best and I think that's the starting point for anyone who wants to get invested in dividend stocks. So now I want to just brief quickly mention the D15 performance. So because I when I created the D15, I just wanted to create a good starting point for all dividend investors, a list of great stocks to look at. So now I just want to briefly talk about the D15 performance comparing to the PSI, the PSCI total return index and the PSI Divy. This is all as of um March 31, so the first quarter of this year. So year to date, well as of March 31, the D15 returned 6.36%.

[00:31:21]The PSCI lost 1.72% and the divy gained 23%. And then in 2025 uh we were at D15 was at 12%. The divy was at 2% 2.4% and then the index lost 7.3%.

[00:31:39]>> Basically stock picking into dividend stocks is working.

[00:31:42]>> I think cuz the D the divy I'm going to say this has some questionable picks.

[00:31:48]Some of them are not great dividend dividend paying stocks. They have questionable um fundamentals at the very least. And the D15 uh when I created the D15 in the criteria, I wanted to make sure that the dividends would be backed by strong earnings, potential earnings growth and great track record of growth >> and consistency >> and consistency. and it's more concentrated because the D15 is 15, the Diva is 20 and there's not a lot of great dividend paying stocks in the PSC.

[00:32:19]>> And this is a really good starting point and upgrade for people who want to jump next from MP2 and I don't know where to start. So, I just passively uh peso cost average or like split out split my money into these 15 names, right? Very passive way of doing it cuz it's already handpicked for them.

[00:32:35]>> Yeah. And these are names you would know. for example, Miralco, >> Manila Water, Manilad, PLLDT, AIT, if you're in, you know, if you're you're familiar with properties. Yeah.

[00:32:47]And banks like BPI, Metro Bank, although you know, lately those two haven't done because of the um the poor performance of well the economy. But it does get carried by ICT, OGP, morale, communal water, LTG, um avoidance power. So it does >> there is a good balance I would say of defensiveness and risk.

[00:33:08]>> Yes. And if they want more of the upside, more of the risk takingaking cuz this one is a very D15 is a very passive way of playing it. But if you want the more upside approach, you could also follow the dividend harvest portfolio.

[00:33:22]So the dividend harvest and the D15 checks the three important boxes that I have that would basically make you graduate from MP2 to to dividend investing which is uh high yield dividend growth and then good price appreciation based on historical patterns historical trends sorry historical >> and dividend growth is and price appreciation is what led the def the dividend harvest portfolio to make 82% in over a 2-year time period.

[00:33:52]>> And I would also argue that there's a better guarantee of the yield than compared to MP2 because the MP2 there's no like dividend per share.

[00:34:00]>> You don't know the the per share amount that you're getting. Yes.

[00:34:04]>> You're just getting 7%.

[00:34:06]>> You just know the rate.

[00:34:07]>> You know the rate. But with dividends you have a history. You can see that okay in the last four quarters AI has paid 62 cents and they're likely to maintain it. So obviously you have an idea already of how much you're going to earn in the next year.

[00:34:19]>> You can analyze it. Yeah. And what I I really love what you said about the capital appreciation side and the dividend growth side because not a lot of people realize that when they do the rates of MP2 let's say 7%. That 7% is fixed. It's not growing but in stocks we have what we call yield on cost right.

[00:34:39]So if you buy a stock cheap enough like let's say you buy stock ABC at 1 peso >> you could lock in now an 8% return or yield >> forever >> forever. So for example, if the stock price went up to 2 peso next time, all those people who buy at 2 peso are just getting 4% >> and you're still at 8% >> and you you're still at 8%. That's the difference.

[00:34:58]>> And then with MP2, you reset every 5 years and basically there's no growth on >> there's no the growth of holding long-term is basically zero compared to um holding long-term in a dividend portfolio because in MP2 you're resetting every 5 years. There's no yield and cost. there's no growth there.

[00:35:18]Well, in dividend investing, there's your yield on cost will grow every year as long as stock keeps paying higher.

[00:35:26]>> Yes. And again to point out like the dividend growth narrative on the of the picture is that if I have 8% today on stock ABC, I mean if the dividends keep on continue to grow, if it's a really good company, right, my 8% today payout would be probably 8.5% next year, 9% next year. my OGP in my personal portfolio when I bought this it was at I think 13% yield now my yield on cost is 23% or 24% >> it's because it's growing >> because it's growing obviously because of the peso >> yes >> because it pays in dollars the y the dividends in a dollar so you get that plus but obviously the yielded cost did grow by a lot >> and it goes hand in hand when the company pays out more dividend you get a higher yield on cost right dividends grows the price I notice actually grows also by a magnitude or by by an ampl by a magnitude. So if it's growing 2x the price could be growing at like let's say 2.5x.

[00:36:22]>> Yeah. ICT was one was is one of those cases where price grew faster than the dividends.

[00:36:27]>> Yes.

[00:36:29]And and lately we've noticed this since 2023 or since actually before 2000 when before we started dividend harvest and the reason why we started dividend harvest because we saw that dividend investing was working and price tends to follow where the dividend grows.

[00:36:44]>> It's because people are willing to pay a higher price if they know that they're going to get a higher dividends or higher payout. Right?

[00:36:50]>> And we've seen that time and time again with the REITs when they always infuse and uh we've seen it with ICT. We've seen it with Morocco. We've seen it with um those dividend stock those stocks who became dividend paying stocks.

[00:37:04]>> Yeah. So I guess that's the really the wizardry of dividend investing, right?

[00:37:09]This is where the re the growth kicks in talaga.

[00:37:12]>> Yeah.

[00:37:13]>> Okay. So for everyone watching out there, may it be you're a dividend investor, may it be you're an MP2 investor as well, how would you advise someone starting out Franco? Like how would they make the split? Because the point of this video isn't to choose which sides to take, right? You can have the best of both worlds. You can have the safety of MP2, you can have the growth side of dividend investing. So, how do you mix the two? Like what's the split?

[00:37:39]>> I won't give us exact amount because that will depend on context, financial context and basically the appetite of any one person. But in just to speak generally, so MP2 is fantastic. think it's a great investment product, but I think it's more for short-term and outside of retirement. If you're, for example, trying to save on a house, on on a wedding or a car, then yeah, MP2 is good because after 5 years, you get that money back and I'm pretty sure by the time you would have saved enough.

[00:38:08]>> Yeah.

[00:38:08]>> For so that's for short term. And then for long-term capital building, wealth building, uh you definitely have to go for dividend investing. So you can depending on your age for if you're young, you would lean more towards dividend investing. If you're older, you would lean more towards uh MP2 because what you're saying is that if you go short-term MP2, it's because there the the payout is guaranteed, right? So if you need the house in 5 years, you know for sure you're going to need it in five years. You put it in MP2.

[00:38:37]>> Yeah. Exactly. And because dividend investing, if to build long-term wealth, you need you need heavy lifting. you need time and >> growth to do the heavy lifting because in MP2 >> uh outside of retirement um you're going to have to reset and you're going to just get that 7%. you don't have that extra 10% capital appreciation because in dividend investing let's say you're yielding on average 6% but your total return on a yearly basis could be higher much higher because it's 6% dividend plus whatever the capital appreciation is but obviously there's the risk you can lose one year and gain more in the other year >> yeah and as I mentioned the stock market could be volatile so like in 5 years from now you don't know if we're like slightly down right but you're quite sure that in a very long time period, dividend investing is going to make you money.

[00:39:28]>> Yeah, I would argue that MP2 isn't the optimal choice for someone under, let's say, 30 years old >> because you want the upside, you want, >> you need the upside. You're young, you need the capital growth, you need to take advantage of the time you have. Uh, if you're focused on retirement and you're just and you want an easy investment, then MP2 is great, >> right? Uh but if you're trying to build your retirement for the long term, let's say in the next 30 40 years, PAR is the way to go.

[00:39:55]>> Yeah. So what's a good split also that I'm thinking is that maybe in the first if you're in the young 20s or 30s, you could be like 80 70 stocks and then 20 30 MP2, right?

[00:40:06]>> Yes, that's okay. That's actually fine.

[00:40:07]If you want to put a number on it, then yeah, that's okay.

[00:40:09]>> And then once you get older, you could like gradually taking out money from stocks, putting it into MP MP2. And also if you never if you don't want do the work then you can always check the dividend harvest portfolio or the DV15.

[00:40:22]And also I agree with everything what you've said and I'd like to add that aside from the split between uh MP2 and stocks you could also cut in some funds right that gets you expos exposure in global stocks because if you don't want to be 100% peso denominated in in your investments right funds is a very good way to go about this and we do have funds under dragonf right so a few examples of this is the manual life >> yeah there are good funds in dragonfly we have the manual life global tech, manual life American growth, manual life semiconductor, and for BPI you have, I'd say the BPI US equity growth, which tracks the S&P 500, and then you have the uh the BPI high dividend uh yield index.

[00:41:07]>> Yeah. So, you can insert 10 20% of your portfolio also into these global funds.

[00:41:14]>> That's that's a good option for those who don't want to think who want to do all the research. they don't want to uh stock pick and they just want to put their money and let someone manage it for them then funds is the way to go.

[00:41:26]>> Yeah. And because at the end of the day we don't have to pick one. I mean investing is all about building >> it's not MP2 or uh stocks. It can be MP2 and stocks and funds >> and it's because we're trying to diversify also like we're going to build an all-weather portfolio. When stocks are down we have MP. I guess my point my point here is to make you guys um >> redirect some of those some of the funds in your MP2 into dividend investing.

[00:41:55]>> Yes.

[00:41:56]>> So before we end today's podcast, Franco, thank you very much for joining us today. Any last words to our audience listening today?

[00:42:03]>> Um worry less about making the perfect investment and just get started and get invested. Uh that's the best way to build experience and long-term growth >> and have and do it mix and match, right?

[00:42:17]>> Yeah.

[00:42:18]>> For our next podcast episodes, I want you guys to comment down below in the comment section what kind of topics would you'd like us to talk about more next. And so if this episode gave you value, hit the like or subscribe button and see you guys onto the next episode.

[00:42:32]Bye everyone. If you like this episode, hit subscribe or follow for more of the Dividend Investor podcast. now on YouTube and Spotify.