How a paluwagan works, and how to manage one
A paluwagan is a rotating savings group common in the Philippines, among co-workers, relatives and neighbours, and among Filipinos working abroad. Each member pays the same amount, often every payday on the 15th and the 30th, and each time one member receives the whole pot, until everyone has received it once.
The name comes from luwag, “ease”: the pot makes a big expense easier. There is no interest; members with an early turn get money sooner, and members with a late turn save.
How does a paluwagan work?
- An organizer sets the amount per hulog (payment), the schedule and the number of slots.
- Members choose or draw their slot, which decides when they receive the pot.
- Each payday every member pays the organizer, in cash, by bank transfer or by e-wallet such as GCash or Maya.
- The organizer gives the full pot to that slot’s member, until every slot has been paid.
How is the order set?
Some groups draw slots (bunutan); others let members pick, with early slots going to people who need the money first. Some members take two slots and pay twice. Agree the rules before the first hulog and keep the list where everyone can see it.
What goes wrong in a paluwagan?
- A member stops paying after their turn. The members with later slots carry the loss.
- Late hulog means the next member gets less than promised on payday.
- Records in a group chat. Screenshots get buried, and totals are hard to prove.
How do you run a paluwagan with Savings Circle?
- Create the group. Choose “paluwagan” as its name type, then set the currency and what each person pays per round. The app uses your word on every screen and reminder.
- Add members from your contacts. They don’t install anything.
- Set the order. Run a random draw in front of everyone, or enter the order you agreed. A random draw saves its seed, so anyone can check later that it wasn’t changed. Members can ask to swap turns, and the swap is recorded too.
- Record payments as they come in, by cash, bank or mobile wallet, with a screenshot as proof if you like. It works offline and syncs later.
- Remind the late ones. One tap opens WhatsApp, SMS or Telegram with a polite message in their language.
- Record each payout. Every entry is dated. A correction is added as a new entry, and the original stays in the history.
Savings Circle never holds or moves money. Members pay each other the way they already do; the app is the shared record of who paid, who is next and what is owed.
Other names for the same idea
In the Philippines it is paluwagan. The same system is a committee in Pakistan and India, a tanda in Mexico, a susu in Ghana, a chama in Kenya and an arisan in Indonesia. Economists call all of these rotating savings and credit associations, or ROSCAs. Savings Circle works for any of them.
Read this guide in Tagalog: paano gumagana ang paluwagan.
Guides
- South Asia: committee, kameti, chit fund, bhishi, kitty party and samity
- Africa: susu, chama, ajo, adashe, equb, hagbad, stokvel, tontine, mukando and chilimba
- The Americas and the Caribbean: sou-sou, tanda, junta, lending circle and pardner
- Asia and the Pacific: arisan, paluwagan and hụi
- The Arab world: jam’iya