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Second bar shows Magic Points
Magic Points, abbreviated as MP, are used to cast skills. They are what allow you to use magic. Each skill requires a certain amount of MP, and if you do not have enough MP, you cannot cast that skill until you obtain enough.
There are some debuff skills which, although do not damage your health, do drain your MP.
MP is VITAL for Mage/Pagan and Priest/Oracles, being magic users.
You can increase MP by adding some stat point to your WIS when you level up. When you level up your MP increases by 5 per WIS point.